What is a Forward Exchange Contract?

The exchange of currencies on a future date, at a rate agreed today.


  • Provides a fixed, known rate; and with greater cash flow certainty for business planning purposes.

  • Assists you in pricing your transactions and services.


  • The forward rate on your transaction may be worse than the prevailing spot rate at maturity.

  • You can't benefit from a favourable exchange rate movement during the term of your agreed FX transaction.

  • You have an obligation to transact at maturity and the cancellation of the contract may incur a cost or benefit to you..

Managing foreign exchange

Movements in foreign exchange rates can impact businesses differently, so it's important to have a strategy tailored to your specific needs.

Learn with NAB

Forward Exchange Contracts Tutorial

Learn more about how to manage foreign exchange risk with forwards.

Global Markets Research

Helping you make sense of credit, foreign exchange, interest rates and commodity markets.

Subscribe to our FX Newsletter

Subscribe for access to monthly foreign exchange articles and insights for your business.

We're ready to help you

Request a call back
Call 1300 960 355

Mon-Fri 8am - 6pm (AEST/AEDT)

Talk to an expert