FRA - Agreement on a Future Interest Rate

An agreement on the fixation of an interest rate with which you can secure your finances from interest risks.

Benefits

Hedging your finances against unfavourable fluctuations of interest rates.

Get Acquainted

A forward rate agreement (SRA) is a deal, the subject of which is an agreement on the fixation of an interest rate for credit for a specific period in the future.

The instrument can be used:

to eliminate the risks arising from fluctuations of interest rates in the future (generally 3, 6, 9, or 12 months).

Arranging deals:

an FRA rate agreed upon beforehand does not result in real provision of the loan,
interest differences between the FRA rate, which is the subject of the deal, and the actual amount of the reference rate (for example PRIBOR, EURIBOR,...) are balanced reciprocally as of the day that the rate is fixed.

The FRA rate is bound to a specific future period. This period is characterised by a pair of numbers (for example, 3 x 6):

The first number indicates the number of months from the conclusion of the FRA transaction that is to lead to the beginning of the period for which the interest rate is secured,
The second number indicates the number of months from the conclusion of the FRA transaction, after which the period of securing the interest rate ends,
In our case (3 x 6) this involves securing for a period which begins in three months and will last another three months.

Terms of Use

These transactions can be used if you have a current account with our bank. The minimum amount for an FRA transactions is the equivalent of 10,000,000 EUR.

The following is required for the transaction:

conclude a general agreement,
the limit for the transaction must be set and approved.

Would you like to learn more? Call 844 117 711. The service is available on working days from 8.45 a.m. to 4.30 p.m.

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