How To Fix GLE_MCA640 - Default exchange rate type 'M' is used as "Target Exchange Rate Type"

SAP Error Message - Details

• Message type: E = Error

• Message class: GLE_MCA - Multicurrency Accounting

• Message number: 640

• Message text: Default exchange rate type 'M' is used as "Target Exchange Rate Type"

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message GLE_MCA640 - Default exchange rate type 'M' is used as "Target Exchange Rate Type" ?

  The SAP error message GLE_MCA640 indicates that the system is using the default exchange rate type 'M' (which typically stands for "Average Rate") as the "Target Exchange Rate Type" in a context where it is not appropriate. This error usually arises in the context of currency translation or when dealing with foreign currency valuations in financial accounting.
  Cause:
  
  Configuration Issue: The system is configured to use the default exchange rate type 'M' for a transaction or process that requires a different exchange rate type.
  Missing Custom Exchange Rate Type: The required exchange rate type may not be defined in the system, or the necessary configuration for the specific transaction is missing.
  Incorrect Settings in Transaction: The transaction or process being executed may not have the correct settings for exchange rate types, leading to the system defaulting to 'M'.
  
  Solution:
  
  
  Check Configuration:
  
  Go to the transaction code OB08 to review the exchange rate types defined in your system. Ensure that the necessary exchange rate types are configured correctly.
  Verify that the exchange rate type you intend to use is set up for the relevant currency pair.
  
  
  
  Adjust Transaction Settings:
  
  If you are executing a specific transaction (like currency translation or foreign currency valuation), check the settings in that transaction to ensure the correct exchange rate type is specified.
  If applicable, modify the settings to use a different exchange rate type that is appropriate for the transaction.
  
  
  
  Customizing Exchange Rate Types:
  
  If you need a specific exchange rate type for your business processes, you may need to create a custom exchange rate type. This can be done in the customizing settings under Financial Accounting (FI) > Financial Accounting Global Settings > Currencies > Define Exchange Rate Types.
  
  
  
  Consult Documentation:
  
  Review SAP documentation or help resources for specific guidance on the transaction you are working with, as there may be additional requirements or configurations needed.
  
  
  
  Testing:
  
  After making changes, perform a test transaction to ensure that the error no longer occurs and that the correct exchange rate type is being used.
  
  
  
  Related Information:
  
  Exchange Rate Types: In SAP, exchange rate types are used to define how currency conversions are handled. Common types include 'M' for average rates, 'B' for bank buying rates, and 'G' for bank selling rates.
  Currency Valuation: Understanding how currency valuation works in SAP can help in troubleshooting issues related to exchange rates.
  SAP Notes: Check SAP Notes for any known issues or patches related to this error message, as there may be specific fixes or recommendations provided by SAP.
  
  If the issue persists after following these steps, it may be beneficial to consult with your SAP support team or a consultant who specializes in SAP Financials for further assistance.