Devisentermingeschäfte

Devisentermingeschäfte, also known as forward foreign exchange contracts, are financial agreements to exchange one currency for another at a predetermined exchange rate on a specified future date. These contracts are used to hedge against the risk of adverse currency fluctuations. Companies that engage in international trade or investment often use these instruments to lock in the cost of future payments or the value of future receipts in their domestic currency.

The key elements of a Devisentermingeschäft are the two currencies involved, the amount to be exchanged, the forward exchange rate, and the settlement date. The forward rate is determined by the current spot rate, interest rate differentials between the two currencies, and the time until the settlement date. A Devisentermingeschäft is a binding contract, meaning both parties are obligated to fulfill the exchange at the agreed-upon terms, regardless of the spot exchange rate on the settlement date.

These instruments are typically traded over-the-counter (OTC) between financial institutions and their clients, or on organized exchanges. They offer certainty in financial planning by eliminating the uncertainty associated with currency movements. However, they also mean that if the spot rate moves favorably, the party using the forward contract will not benefit from that movement. The primary purpose is risk management rather than speculation.