# What are the base currency and the quote currency?

Each country has its own currency, but it can also happen that countries group together to form an economic community and mint a single currency for their use, as is the case with Europe (Poland is an exception).

When traveling to a foreign country we need to find out what currency is used there, and – if we want to have cash – change the currency of our country to our destination’s currency. For example, if we live in Italy (which uses euros -EUR-) and we are going to visit Japan (where the currency is the Japanese yen -JPY-) we will have to exchange euros for yen. The question is, how many Japanese yen will I get for one euro?

Base currency

In asking this question, we think of what one euro is worth in terms of the Japanese yen. At the time of writing, 1 euro is equivalent to 131.43 Japanese yen. When we compare one currency against another, the currency that comes first is always worth 1 unit and it is called the base currency.

Quote currency

In the second part of the comparison, we have the value of 1 unit of the base currency in another currency. In other words, the second value in the currency comparison is always the number of units needed to buy 1 unit of the base currency. This second value is called the quoted currency and its value depends on the market price.

In short, when comparing two currencies, the first currency is always equal to 1 and it is called the base currency. The currency that follows is called the quote currency and is equal to the number of units needed to buy 1 unit of the base currency.

When we see EUR/JPY 131.43 we understand that to get one euro (base currency) we need 131.43 Japanese yen (quote currency).