An FRA is a contract between two parties which fixes the rate of interest that will apply to a nominal future loan or deposit for an agreed amount, in an agreed currency, to be drawn or placed at a future date for an agreed term. BBK can sell FRAs to its clients who desire to quantify the cost of a future loan or revenue from a future investment.

The buyer of an FRA will be compensated in cash by the bank for any loss that may be incurred by him on account of change in interest rates. On the other hand if the interest rate moves in his favor, any gain on this count is to be surrendered by him to the bank. FRAs can be bought for exposures maturing from three months from date of purchase. Maximum period of an FRA is 12 months with a maximum final maturity of 24 months.

FRA´s are available in all major currencies.