Exchange rate clause

An exchange-rate clause adjusts a charter or contract payment for movements between the currency of account and the currency of payment, allocating foreign-exchange risk between owner and charterer. Where hire is agreed in one currency but paid in another, the clause fixes a reference rate at a base date and recalculates the amount due as the rate moves, or splits the difference at a stated threshold. It is common in fixtures with non-dollar cost bases, such as crew or yard payments in euros or yen. It overlaps with the devaluation clause but targets ongoing rate movement rather than a single official devaluation.