DBS Group Research Webinar: NDF currency markets in Asia
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Published on ● Video Link: https://www.youtube.com/watch?v=oczjZOMI2Tk
Non-deliverable currency forwards (NDFs) are cash-settled through net payments that are equivalent to the difference between the spot rate at the maturity date and the previously agreed forward rate. They are attractive due to the absence of regulation, longer trading hours, reduced documentation requirements, often good liquidity, no convertibility risk, and reduced credit risk because of net settlement. NDF markets in many Asian emerging market currencies are large, rapidly growing, and often exceed onshore markets in transaction volume. There are however concerns over spillovers from the offshore to the onshore market and to other onshore financial markets, with potential financial stability implications.
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