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Hi, with forward exchange contracts am I correct that we ‘arrange’ them rather than buy and sell them?
I know with FRAs we buy if we’re borrowing and sell if we’re depositing. Is there similar terminology with forward exchange contracts?
Yes they have to be arranged so are known as ‘over the counter’ contracts.
I don’t think the buy/sell is useful with forward exchange contracts. You are contracting to, say, buy $ sell £ or else selling $ and buying £. They are not traded contracts.
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