Importance of forward contracts in the financial crisis

Marina Djenic (), Snezana Popovcic-Avric () and Lidija Barjaktarovic ()
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Marina Djenic: Faculty of Economics, Finance and Administration, Teaching Assistant
Snezana Popovcic-Avric: Faculty of Economics,Finance and Administration, Professor
Lidija Barjaktarovic: Faculty of Economics, Finance and Administration, Assistant Professor

Journal of Central Banking Theory and Practice, 2012, vol. 1, issue 2, 75-96

Abstract: This research paper focuses on the level of development of the forward market in Serbia and examines the presence and advancement of use of forward contracts. Despite a de facto present volatility, the economy does not use this hedging instrument frequently. The research starts from the analysis of the legal framework that refers to the implementation of forward contracts, followed by the analysis of the level of development of the forward market, endeavouring to find the answer to the question why local companies have not yet clearly understood their own benefits from the use of this instrument in their day-to-day operations. The research is aimed to examine the use of forward contracts in Serbia, as well as the key economic and legal issues which are relevant for their successful implementation.

Keywords: forward contracts; forward markets; hedging; foreign exchange rate; foreign exchange risk (search for similar items in EconPapers)
JEL-codes: E44 F31 G21 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:cbk:journl:v:1:y:2012:i:2:p:75-96

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