(Conversion of 17SDR into local currency)
Q.
When settling a cargo claim, how do you calculate when the 17SDR per kg. liability rate is used? Please also explain how to truncate. (11 Feb 04)
A.
The correct procedure to convert SDR into Japanese Yen is as follows:
First, you must covert 17SDR into Japanese Yen. By accessing the IMF website, you will note that the SDR value in JPY on 9 Mar h 2004 was JPY163.79, therefore 17SDR will equate to JPY 2,784.43 which is truncated to JPY 2,784.

Thence, you need to ascertain the cargo liability limits for a given shipment. Say, for example, the shipment weighed 543.21 kg. You would multiply JPY 2,784 x 543.21 kg which produces JPY 1,512,296.60 again truncated to JPY 1,512,297 This amount is the total cargo liability amount for a shipment weighing 543.21 kg. The golden rule is to ascertain the JPY value of 17SDR first and truncate that value first and thence apply the shipment weight. You do not calculate the total SDR value of a shipment and convert the total SDR into Yen.

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