Currency Forward Contract
/ˈkʌrənsi ˈfɔrwərd ˈkɑntrækt/
Definitions
- (n.) A binding agreement to buy or sell a specific amount of foreign currency at a predetermined exchange rate on a set future date, used to hedge against currency risk.
The importer entered into a currency forward contract to lock in the exchange rate for the payment due in six months.
Forms
- currency forward contract
- currency forward contracts
Related terms
See also
Commentary
Currency forward contracts are distinct from futures contracts in that they are customized and traded over-the-counter rather than on an exchange.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.