Definition for : Forward currency transaction
GLOSSARY LETTER
A forward currency transaction is a Forward transaction with a currency pair at a Forward exchange rate determined at the time a deal is concluded. Tantamount to borrowing today the Present value in the currency to be sold at Maturity of this transaction, exchanging it at the current rate and investing for the same Maturity the corresponding amount in the other currency of the currency pair.
(See Chapter 49 Managing working capital of the Vernimmen)
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