Fixing

1.

The setting of an interest rate for a predetermined future period.

For example, the periodic re-setting of the interest rate on a floating rate loan.

2.

The use of derivative instruments such as Forward rate agreements (FRAs) for hedging purposes, to effectively fix a hedged rate.

3.

A fixing instrument (or fixing derivative) is one which hedges an exposure by effectively fixing a hedged rate for it.

Contrasted with an insurance-type instrument, such as an option.

See also

• Fixing instrument
• Forward rate agreement
• Option