Definition
A contract with a bank to buy or sell foreign currency at a fixed rate on a future date, used to hedge against rand exchange-rate movements between order and payment. It fixes the cost of an import or the proceeds of an export in advance. South African FECs must be backed by an underlying trade transaction and comply with South African Reserve Bank exchange control rules.
Frequently asked questions
What is Forward Exchange Contract (FEC)?
A contract with a bank to buy or sell foreign currency at a fixed rate on a future date, used to hedge against rand exchange-rate movements between order and payment. It fixes the cost of an import or the proceeds of an export in advance. South African FECs must be backed by an underlying trade transaction and comply with South African Reserve Bank exchange control rules.
Which glossary terms are related to Forward Exchange Contract (FEC)?
Forward Exchange Contract (FEC) is a procurement term in the South African import/export industry. Related terms in the same area include Advance Payment, Bank Guarantee, CSD (Central Supplier Database), Designated Sectors, Documentary Collection — each has its own plain-English definition in the TradeCaravan glossary.