Forward rate agreement


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Forward rate agreement (FRA)

Agreement to borrow or lend at a specified future date at an interest rate that is fixed today.

Forward Rate Agreement

An agreement between two parties to exchange two currencies or interest rates at a given rate at some point in the future. A forward rate agreement mitigates foreign exchange risk or interest rate risk for the parties. It is most useful when both parties have operations or some other interest in a country using a given currency or investment vehicle with a floating interest rate. Forward rate agreements are over-the-counter contracts and are also called future rate agreements.
References in periodicals archive ?
Three-month interest rates three months hence, as implied by forward rate agreements, ended the period at 3.59 percent, 42 basis points above June 30 levels.
Turnover in interest rate derivatives has increased since the mid-1990s, reflected in greater trading in forward rate agreements and interest rate swaps.
Implied yields on three-month forward rate agreements rose 15 basis points immediately after Chairman Greenspan's testimony.
For the survey on OTC trading in interest rate derivatives, the banks also reported on their OTC transactions in interest rate swaps, interest rate options and forward rate agreements in April 2016.
TriOptima, an award-winning post trade infrastructure provider, announces today that 18 SwapClear members have compressed 40% of outstanding notional and 49% of outstanding trades in Polish zloty (PLN) interest rate swaps and forward rate agreements (FRA) in the latest triReduce compression cycle.
The agreement will not include loans in the bonds and certificate market as well as forward rate agreements, as these are exemptions in the Public Procurement Regulations, Section 1-3 (2), letter E.
Announcement of competition: Procurement will not include loans in the bond and commercial paper markets, and forward rate agreements.
The procurement will not include new loans in the bonds and certificate market and forward rate agreements. Os municipality is focussing on entering into framework agreement with up to 5 suppliers.
forward rate agreements, swaps, futures, options) are financial products which are used by banks or companies for managing the risk of interest rate fluctuations.

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