Treasury Sales

Spot Foreign Exchange

‘Spot deals’ are so called because they are undertaken ‘on the spot’. A spot deal is defined as an agreement between a Bank and its customer for the sale/purchase of a specific amount of foreign currency at a specified exchange rate for delivery in two working days.

Forward Foreign Exchange

A forward exchange contract rate is based on the prevailing spot rate plus (or minus) a premium (or discount) which is determined by the interest rate differential between the two currencies involved.

Derivative Products

A derivative is an instrument whose price is derived from one or more underlying instruments. The ?underlying? is often a financial asset or rate but it does not have to be. Simply, the derivative itself is a contract between two parties whose value is determined by fluctuations in the underlying asset.