Forward Exchange Contracts

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A forward foreign exchange rate is the exchange rate at which one currency can be exchanged for another currency for settlement on a predetermined future date (maturity date).

Lock in the rate 

Business clients can take advantage of forward exchange rates using forward exchange contracts. A forward contract allows you to lock in an exchange rate today for a transfer that needs to occur in the future (between two days and twelve months from today), thereby protecting you against exchange rate movements.

Forward contracts explained

  • The forward rate is calculated by adjusting the current market rate (the spot rate) for "forward points", which take into account the difference in interest rates between the two currencies and the time to maturity. 
  • The forward points are based on a formula which is standard industry practice; this is not an extra margin charged by OzForex 
  • You do not have to pay the full amount owing on the forward contract until the maturity date. 
  • There may be a deposit required at the commencement of the transaction and/or at a later stage prior to the maturity date.

Benefits for your business

  • Manage your business cash flow
  • Budget effectively and provide confidence in your future accounts receivable
  • Focus on your business without worrying about daily FX movements

If you would like a quote for a forward exchange rate or want to know more about forward rates register now for instant online access or contact us.

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