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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Interest rate swaps, forward rate agreements and securitization are among the more popular techniques used today.
Although there are no specific regulations or instructions regarding ISDA documentation, the CBK issued an instruction in 2006 whereby licensed Kuwaiti banks may enter into options, financial futures, interest rate futures and forward rate agreements both for hedging and trading purposes.
Eurodollar futures are forward rate agreements that allow market participants to speculate on or hedge against movements in short-term interest rates.
The systems provided ADIC employees with an effective way to handle different types of transactions, varying from dealing room; namely, foreign exchange Co spot, forward and swaps, money markets Co acceptances and placements, Forward Rate Agreements (FRAs), Interest Rate Swaps (IRS), futures, options, commodities, corporate banking, securities Co bonds, Mortgage Backed Securities (MBS), Asset Backed Securities (ABS), equities proprietary trading and brokerage, local shareC* It also provides more than 400 different standardized and customized reports for all levels of users.
The survey also covers interest rate derivative products, such as forward rate agreements and interest rate swaps.
Public Hearing: Competition Policy; Discussion with Commissioner Mario MONTI; Discussion with Commissioner Pedro SOLBES MIRA; Report by Karl von WOGAU (EPP-ED, D) on the situation of the European economy: report in preparation for the Commission recommendation on the Broad Economic Policy Guidelines; Report by Piia-Noora KAUPPI (EPP-ED, FIN) on the European system of national and regional accounts, swaps and forward rate agreements; Discussion with Mr LAMFALUSSY, Chairman of the Group of Wise Men on financial services- Legal Affairs and Internal Market: Tuesday 27.
For example, the London Clearing House plans to introduce clearing of interest rate swaps and forward rate agreements in the second half of 1999, and the Electronic Broking Service, a brokerage system for foreign exchange contracts, reportedly is planning to begin brokering forward rate agreements.
The systems provided ADIC employees with an effective way to handle different types of transactions, varying from dealing room; namely, foreign exchange eCo spot, forward and swaps, money markets eCo acceptances and placements, Forward Rate Agreements (FRAs), Interest Rate Swaps (IRS), futures, options, commodities, corporate banking, securities eCo bonds, Mortgage Backed Securities (MBS), Asset Backed Securities (ABS), equities proprietary trading and brokerage, local shareeC* It also provides more than 400 different standardized and customized reports for all levels of users.
The survey also covered interest rate derivative products, such as forward rate agreements and interest rate swaps.
Interest rates implied by forward rate agreements rose to reflect increased market expectations for tighter monetary policy.