Business and Personal Finance Dictionary

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• NONDELIVERABLE FORWARD
  
  A cash-settled, forward contract, typically on a nonconvertible or thinly traded foreign currency (probably from an emerging or submerging (q.v.) market) or two such currencies, that settles into a convertible currency (typically the USD). The cash value is a function of the contract's reference rate(s) on the fixing date, typically, two business days before the value date. Its main atraction is avoiding currency controls. (Source: William Rhode, "Learning Curve: Nondeliverable Swaps, Derivatives Week, 5/5/97.)
  
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