With a forward contract, you can purchase a foreign currency for a future date. Your forward contract helps you to project – and protect – your future costs for purchases, and revenues for sales.
Forward contracts can be booked out as far as 12 months.
Let’s say you have a USD dollar invoice due in September but it is only April. By buying a forward contract, you can lock into an exchange rate.
What’s so great about that?
You will know the final cost of a foreign purchase without having to worry about fluctuating currency exchange.
Cost projections are more accurate. No need to worry about volatile currency fluctuations.
You can also purchase a forward contract with an open window. With an open window, you can choose when to execute – offering you even more flexibility and security for making global foreign currency payments.