Forward currency contract

Forward currency contract

An agreement to buy or sell a country's currency at a specific price, usually 30, 60, or 90 days in the future. This guarantees an exchange rate on a given date.

Forward Currency Contract

An agreement between two parties to exchange two currencies at a given exchange rate at some point in the future, usually 30, 60, or 90 days hence. A forward currency contract mitigates foreign exchange risk for the parties and is most useful when both parties have operations or some other interest in a country using a given currency. Forward currency contracts are over-the-counter contracts.
References in periodicals archive ?
Financing costs relating to debt restructuring will add another pounds 15 million, and the closure of a forward currency contract another pounds 79 million in charges before tax relief, again to be booked as an exceptional cost in the 2003-2004 accounts.
The Fund seeks enhanced income by investing in short duration (typically less than one year) emerging market forward currency contracts and other emerging market debt instruments.
The ratio of the interest rates between two countries must equal the ratio of forward currency contracts and their spot currency rates, also known as parity.
Risk management strategies include derivatives in the form of forward currency contracts for purchases in foreign currencies which seek to mitigate this risk in the short, medium and long term.
Short-term risk-management strategy: Acme mitigates its nonfunctional currency exposure in accounts receivable by hedging through forward currency contracts (see the sidebar, "Common Hedging Strategies for Foreign Currencies").
ABF said that the collapse in sterling against the dollar since the Brexit vote will have "no effect" on Primark this year because of the firm's practice of taking out forward currency contracts.
Global Banking News-September 1, 2015--China wants banks to keep reserves for forward currency contracts
Forward currency contracts have been widely used by importers/exporters to hedge against currency risk.
This ruling by Bahrain-based AAOIFI has contributed to widespread opposition to the use of muwa'adah in forward currency contracts.
Regardless of whether SAA was able to eventually negotiate a deferral or other reprieve to honor such obligations in its weakened financial state, in light of its forward currency contracts, the company would have had no choice but to honor the financial commitment to purchase dollars/sell rand.
The Fund seeks enhanced income by investing in short duration (typically below one year) emerging market forward currency contracts and other emerging market debt instruments.
It aims to improve income by investing in short duration emerging market forward currency contracts and other emerging market debt instruments.