Forward contract is a form of foreign currency trade with a settlement date set in the future. EXIM Thailand’s Forward Contract service aims to protect importer/exporter making/receiving payment in foreign currency from foreign exchange fluctuations, allowing them to ensure better cost/profit management.
- A forward contract line must be established.
- Buyer/seller of a forward contract must have underlying export/import transactions or estimated underlying trade transactions and must present relevant documents to the Bank on contract signing date.
- A forward contract cannot be cancelled. If cancellation is required, compensation will be calculated and paid based on the difference between the predetermined forward rate and the prevailing market rate.
Forward contract has binding effects. If, on the day of settlement, the prevailing market rate is more or less favorable than the predetermined forward rate, the buyer is obliged to use the forward rate as previously specified.