The combination of a spot transaction in foreign exchange with a forward transaction in foreign exchange. The market participant thus combines the spot sale of foreign exchange with a simultaneous forward repurchase; or else he combines a spot purchase of foreign exchange with a simultaneous forward sale. – See back-to-back loan, foreign exchange market, foreign exchange forward, Herstatt risk, hedging, nondeliverable forwards, option, success rates, swap, currency option. – Cf. Monthly Report of the Deutsche Bundesbank, July 2005, pp. 29 ff. (also formulas and overviews there).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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