Nondeliverable Forward (NDF)

a short-term forward contract on a thinly traded or nonconvertible foreign currency not otherwise internationally traded. Contracts in the NDF market are settled in cash and the profit or loss is the difference between an exchange rate agreed upon on a fixing date and the spot rate at the time on the settlement date . NDFs are typically quoted for time periods of one month to one year and are quoted and settled in U.S. dollars.
See also forex market.

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