Forward rate

It is the rate quoted by foreign-exchange traders for the purchase or sale of foreign exchange in future (at least two business days but usually after at least one month). The difference between the spot and forward rate is known as either forward discount or forward premium on the contract. If the domestic currency is quoted on a direct basis and the forward rate is less than the spot rate, the foreign currency is selling at a discount. If the forward rate is higher than the spot rate, the foreign currency is selling at a premium.