what is a forward exchange contract fec 
a forward exchange contract fec is a special over the counter otc foreign currency forex transaction that allows traders to exchange currencies that are infrequently traded these may include minor currencies as well as blocked or otherwise inconvertible currencies forward contracts are agreements between two parties to exchange a pair of currencies at a specific time in the future these transactions typically take place on a date after the spot contract settles and are used to protect the buyer from currency price fluctuations formula and calculation of forward exchange contract fec the forward exchange rate for a contract can be calculated as 