What are Forward Contracts?


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Forward contracts :
Foreign Exchange transaction in which the counter parties agree to a settlement beyond
the spot date are called ‘forward transactions’ of ‘forward contracts’. Rates applicable to
such transactions are called ‘forward rates’. Forward rates are derived from the Spot Rates
by adding or subtracting a factor called Forward Margin. Forward Margin represents the
interest differential between the two currencies for the given maturity. Forward margins are
also referred to as SWAP POINTS as SWAP MARGINS.


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MT UVA BMS

MT UVA- University, Vocational and Affiliated Education for BMS

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