Non-Deliverable Forward


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Non-Deliverable Forward

A forward contract on a low-volume or inconvertible currency that cannot be settled by delivery of the underlying. In a non-deliverable forward, the parties net the difference between the exchange rate listed in the contract and the spot rate, and one party pays the other that difference. They are usually settled in U.S. dollars. Multinational corporations sometimes use non-deliverable forwards to hedge against risk associated with comparatively illiquid currencies.
References in periodicals archive ?
Chakrabarti, Rajesh (2007), "Offshore Betting on the Indian Rupee- the Non-Deliverable Forward Market", ISB insight, The Indian School of Business Magazine, December.
Thomson Reuters, parent company of Reuters News, acted as the agent for the Association of Banks in Singapore, collecting and calculating the currency rates used as references for non-deliverable forwards.
Since the system does not require physical delivery of the hedged dollar, which is only removed from the account of Nepali banks, it is known as non-deliverable forward contract .
Local authorities have been concerned about systemic risks posed by rapid foreign capital flows in and out of domestic markets, and are particularly concerned about the recent hike in the market for non-deliverable forward contracts.
Previously, most companies outside and within China had been excluded from settling in RMB, with all trades being settled net of USD in the non-deliverable forward market.
Under the terms of the non-deliverable forward swap agreement, institutions can complete a transaction at a specified bitcoin exchange rate against any currency and hedge the exchange rate for a specified period of time.
A non-deliverable forward is an FX Forward for which the physical exchange of currency at expiry is replaced by settlement between counterparties of the net profit / loss on the contract, calculated off the prevailing spot rate two days prior to settlement.
2 million foreign exchange loss, mainly non-cash, generated by the impact of the depreciation of the Brazilian Real and the Argentine Peso on our outstanding dollar-denominated debt and the mark-to-market effect of non-deliverable forward currency hedges, and (ii) a $16.
TT will support trading of spot FX, precious metal and non-deliverable forward (NDF) contracts through its high-speed gateway to the EBS platform.
In addition, the company provides OTC clearing services for 12 OTC Non-Deliverable Forward currency pairs, as well as 26 Cash Settled Forwards.
One-year non-deliverable forward contracts traded in Hong Kong continued to express expectations for future yuan depreciation, with quotes at 6.

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