What are interbank rates?
Interbank rates are the rates banks/brokers quote other banks/brokers for trades between banks (inter-bank) for transactions in excess of $1,000,000 or equivalent. • What is a Spot Contract? A spot contract is a contract to buy or sell foreign currency at today’s exchange rate, with settlement occurring typically two business days later. Spot contracts are typically used for foreign currency payments or for converting foreign currency receipts into U.S. Dollars. • What is a Forward Contract? A forward transaction is a contract to buy or sell a currency at a fixed rate on a specified future date. Forwards contracts allow a client to lock in today’s Forward Exchange Rates and eliminate the risk of future volatility. Venstar offers short and long-dated forwards in a variety of currencies. A 10% deposit is required for forward transactions (the deposit must be received within 2 business days.) Forwards are calculated based on the amount of time going forward, i.e. 30 days, 6 months, 12 mon
