A Forward Contract is a trade for which a favourable rate is agreed upon in advance though payment will occur on a specified date in the future. Once booked, the rate will never change. Used for example, by import & export clients who need to fix their exchange rate when purchasing goods in the future so that their re-sell prices can be stabilised. A forward contract can only be fixed for 1 year in advance and requires deposit of up to 10% with the balance payable upon maturity. As an example:
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