Forward interest rate

Forward interest rate

Interest rate fixed today on a loan to be made at some future date.

Forward Interest Rate

An interest rate to which a borrower and lender agree for a loan to be made in the future. According to the unbiased expectations hypothesis, forward interest rates predict spot interest rates at the time the loan is actually made, but many analysts dispute whether this is true.
References in periodicals archive ?
Besides, under a forward interest rate swap agreement, it effectively fixed LIBOR at 2.
As a response, ICBC has rolled out foreign exchange hedging products and helped enterprises avoid risks of exchange rate and interest rate by adopting financial instruments such as forward exchange rate and forward interest rate, swap, option and hybrid instruments.
Cedar said it also entered into forward interest rate swap agreements which convert the LIBOR rates to fixed rates for the new term loans beginning July 1, 2014 through their maturities.
The meeting, chaired by President Xi Jinping, called for keeping reasonable growth in credit and social financing next year, while pushing forward interest rate and yuan currency reforms.
Furthermore, inflation pressure is building, which should bring forward interest rate rises in the developed markets and encourage policy tightening in emerging markets.
These are usually summarized in a forward interest rate curve.
Business leaders and unions called for the Bank of England's monetary policy committee to bring forward interest rate cuts to aid the ailing economy.
Norges Bank calculates the forward interest rate using four money market rates with maturities between one to twelve months, and nine swap rates (7) with maturities from two to ten years.
We investigate the sensitivity of the prices of cap derivatives to alternative specifications of the forward interest rate derivatives.
Finance director Margaret Ewing said BAA's future borrowings would be largely protected from rising interest rates as it had put in place forward interest rate swaps for about 70 to 75 per cent of its future debt between now and 2008.
Risk strategies: The company uses derivative financial and commodity instruments, where appropriate, to manage its market risks, including cash flow hedges, fair value hedges, net investment hedges, foreign currency forward contracts and options, currency swap agreements, interest rate swaps and forward interest rate contracts.
A forward interest rate is the interest rate for a future time period as implied by the current shape of the yield curve.

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