Forward forward contract

From ACT Wiki
Jump to navigationJump to search

A forward forward borrowing or deposit is a binding contract struck today, for the physical borrowing or lending of funds at a fixed future date.

(At an agreed rate, for a predetermined fixed period.)

The Principal amount borrowed or lent is physically transferred between the parties, and repaid - plus the contracted amount of fixed interest - at maturity.


Not to be confused with a Forward Rate Agreement, which is a derivative contract for differences.


See also