Trading Terms

Forward exchange contract (FEC)

A foreign exchange forward contract is a mutual agreement between a customer and a bank. The customer agrees to purchase or sell a specific amount of foreign currency from or to the bank at a predetermined future date. This arrangement allows both parties to secure a future exchange rate, providing a level of certainty in an uncertain market. It is a commonly used tool in international trade and finance, providing risk management and hedging opportunities for businesses and individuals.

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