A forward exchange contract is an agreement to exchange currencies at a set rate on a future date or during an agreed period. Businesses use forwards to reduce uncertainty, but availability, collateral, cancellation costs, and regulatory treatment depend on the provider and jurisdiction.
Quick reference for Forward exchange contract
| Check | What it means for the transaction |
|---|---|
| Category | Business payments and foreign exchange |
| Record to keep | Keep the currency pair, quoted amount, rate source, quote time, fees, payment route and received amount when they apply. |
| Do not infer | A displayed rate is not automatically the rate applied to the payment, and it does not guarantee the Recipient amount. |
Forward exchange contract and nearby terms
- Foreign exchange rate: A foreign exchange rate states how much of one currency is exchanged for another.
