Extending a Forward Contract

A. D. P. Edwards

Chapter 9 in The Exporter’s & Importer’s Handbook on Foreign Currencies, 1990, pp 48-52 from Palgrave Macmillan

Abstract: Abstract One of the great bogys in most people’s minds about selling currency forward is what happens if, having undertaken to deliver the currency in say about three months time, you cannot deliver it because the buyer is late in paying. This does not necessarily present a problem. You nevertheless have to meet your commitment to deliver the currency and as you are not going to receive the currency from the overseas buyer you have to go into the open market and buy it at the spot rate in order to close out your contract with the bank. This may cost you money or you may make money depending on what the spot rate has done in relation to your original conversion rate and forward rate.

Keywords: Interest Rate; Open Market; Foreign Currency; Forward Rate; Additional Loss (search for similar items in EconPapers)
Date: 1990
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-11852-6_10

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349118526

DOI: 10.1007/978-1-349-11852-6_10

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().