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FORWARD RATE AGREEMENTS (FRAS)

Statistics Directorate    
French Equivalent: Contrats de garantie de taux (forward rate agreements-FRA)

Definition:
Forward rate agreements (FRAs) are arrangements in which two parties, in order to protect themselves against interest rate changes, agree on a notional interest rate to be paid, at a specified settlement date, on a notional amount of principal that is never exchanged; FRAs are settled by net cash payments and the only payment that takes place relates to the difference between the agreed FRA rate and the prevailing market rate at the time of settlement.

Source Publication:
SNA 11.38 [7.106].

Hyperlink:
http://esa.un.org/unsd/sna1993/introduction.asp

Statistical Theme: National accounts

Created on Tuesday, September 25, 2001

Last updated on Monday, November 12, 2001