← Foreign Exchange (Forex) Products and Risk Management

Forwards: pricing, documentation and settlement

Module 02 / 5 · 70 min

Price a birr forward from interest rate parity, turn it into a client rate, and document and settle it correctly.

In this module you will learn to

Explain what a forward contract is and what FXD/04/2026 allows
Derive a forward rate from interest rate parity and compute forward points
Build a client forward price from mid rate, spread and credit charge
Describe the documents, settlement steps and what happens when dates change

Built on

Erudite Africa course specification: 1.l Foreign Exchange (Forex) Products and Risk Management, Level 2 Intermediate (October 2026)
Erudite Africa: Ethiopian Context programme overview and regulatory register (October 2026)
NBE directives as listed in the lessons: FXD/01/2024, FXD/04/2026, FXD/05/2026, SBB/96/2025
National Bank of Ethiopia Proclamation No. 1359/2025
NBE Monetary Policy Committee meeting No. 7 press release (13 July 2026)
IFRS 9 Financial Instruments (hedge accounting overview)

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.