Under a forward agreement, a designated bank and a domestic company enter into a forward FX contract to outline the foreign currency and exchange rate that will be utilized to settle the underlying transaction as well as the value and tenor of the transaction. On the day of delivery, the transaction is completed using the agreed-upon currency, sum, and exchange rate. Forward foreign exchange contracts can help clients secure their preferred exchange rate zone while lowering currency risk. A forward contract can be used by a local consumer to lower risk exposures associated with financial, investment, and international settlement processes.