What is a currency forward rate?
A currency forward rate is the exchange rate agreed today for a currency exchange that will settle at a future date. It’s derived from the spot rate and the interest rate difference between the two currencies, based on the theory of interest rate parity.
The formula
Forward Rate = Spot Rate × (1 + Domestic Rate × t) / (1 + Foreign Rate × t), where t is the time to maturity in years (days/360). The currency with the higher interest rate typically trades at a forward discount, and the lower-rate currency at a forward premium.
This calculator is for general financial education purposes, not trading or investment advice.
Last reviewed August 2026