Forward currency contract
(redirected from Forward Exchange Transactions)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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
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