A Forward Exchange transaction is the purchase or sale of foreign currencies for delivery on a future date. This is extremely useful for clients having foreign currency assets or liabilities maturing on a later date, to avoid losses on account of movement in rates. The due date of the contract has to be a working day in both currency centers.

Forward exchange may also be arranged for delivery during a specified period, with the actual delivery date being at the option of the customer subject to notice of 2 working days. Failure to deliver currencies under the contract may lead to payment of cancellation charges, which will depend on the movement of exchange rates in the interim period.

Forward exchange is offered in all major, and many minor currencies.

The maximum maturity date will depend on the concerned currency, although for most it is likely to be one year.