Definition: Forward rate agreement (FRA)

Category: European System of Accounts (ESA)

Contractual arrangement in which two parties, to protect themselves against interest rate changes, agree on an amount of interest to be paid, at a specified settlement date, on a notional amount of principal that is never exchanged. FRAs are settled by net cash payments in a similar way as interest rate swaps. The payments are related to the difference between the forward rate agreement rate and the prevailing market rate at the time of settlement (ESA 2010).

Contractual arrangement in which two parties, in order to protect themselves against interest rate changes, agree on an interest to be paid, at a settlement date, based on a notional amount of principal that is never exchanged. The payments are related to the difference between the agreement rate and the prevailing market rate at the time of settlement (ESA 1995). http://ec.europa.eu/eurostat/product?code=KS-02-13-269&mode=view European Union, Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European system of national and regional accounts in the European Union, Official Journal of the European Union No L 174, 26.06.2013, p. 1 - 727

Eurostat, "European System of Accounts - ESA 1995", Office for Official Publications of the European Communities, Luxembourg, 1996