Forward rate agreement

Also found in: Dictionary, Acronyms, Encyclopedia, Wikipedia.

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 ?
Market participants scaled back expectations for an end to the Bank of Japan's accommodative monetary policy, with forward rate agreements suggesting expectations for virtually no change in policy through the end of 1997.
Valuing swaps as a series of forward rate agreements
denominated Money Market instruments (Fed Funds, Bankers Acceptances, Certificates of Deposit, Deposit Rates, Forward Rate Agreements, Interest Rate Swap, plus more), an enhanced and expanded quote Alert function, and the calculation of Volume Weighted Average Price (VWAP).
Product types include caps/floors, forward rate agreements, options, swaps, swaptions, and cross currency swaps.
The new multi- currency system also allows portfolio managers to incorporate currency forward rate agreements into their analyses, showing overall exposure on a hedged and unhedged basis.
Part VI Forward Rate Agreements and Forward/Forward Agreements 1.
The first guarantee covers all of NWMA's foreign-exchange transactions; the second covers interest rate swaps, forward rate agreements, interest rate options, bond options, or options on any of these transactions to designated counterparties.
The IR TRR holds summary transaction-level information for the full range of non-cleared OTC derivative interest rate transactions, including caps/floors, forward rate agreements, options, swaps, swaptions, and cross currency swaps.
The easy adaptability of the software has allowed Infinity to deliver a system that supports local market conventions in South Africa, including bond pricing, settlements and forward rate agreements.
Offers advanced pricing and analytic capabilities including Greeks and support for: IR swaps and swaptions, IR caps and floors, Forward rate agreements.
Nasdaq: BARZ), a leading provider of analytical models, software, consulting and money management services, and Prebon Yamane, a premier institutional broker widely recognized as a leader in interest rate derivatives, today announced that they plan to launch POSIT-FRA -- the first computer-based system for crossing forward rate agreements (FRAs).
The new curves are constructed with either a combination of the domicile country's cash rate data and Forward Rate Agreements or cash rates and futures data, which is part of a continual effort to reflect current market conventions in valuation methodologies.

Full browser ?