The term Base Currency is used for accounting purposes to refer to the currency in which an investor maintains its book of accounts. For purposes of an IB account, each client will specify at the point of application a single Base Currency which will determine the currency of translation for statements and the currency used for determining margin requirements. While the Base Currency selected will typically be the principal form of currency in which the client intends to hold cash and the denomination of instruments which the client trades, clients are eligible to hold cash balances and trade instruments denominated in either a Base or non-Base Currency. If the client elects to maintain a cash or IRA account then they are restricted to holding only long cash balances regardless of the currency of denomination. IRA accounts are further restricted in that deposits and withdrawals may only be made in the Base Currency.
Clients maintaining a margin account may change their base currency at any time through Account Management and may effect deposits or withdrawals in a non-Base currency. Base Currencies are available in AUD, CAD, CHF, CNH, CZK, DKK, EUR, GBP, HKD, HUF, ILS, JPY, MXN, NOK, NZD, RUB, SEK, SGD or USD. In addition, IB-India accounts are required to maintain a Base Currency of INR.
In addition, for foreign exchange market purposes, the term Base Currency refers to the first currency in a currency pair and the second, the Quote Currency. For example, for the USD.CAD cross pair, USD is considered the Base Currency and CAD the Quote Currency. In Forex markets the USD is generally considered the base currency for quoting purposes, that is the quotes are expressed as a unit of USD $1 per the other currency quoted in the pair. The primary exceptions to this rule are the GBP, the EUR and the AUD.