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What’s the difference between FX hedging and forward contracts?

Send money Lock your FX rate

FX hedging is the broader term that means protecting your business from exchange rate fluctuations. One of the most common ways to do that is by using a forward contract—which is just a tool that lets you lock in today’s exchange rate for a payment you plan to make in the future.  

While the terms are often used interchangeably, a forward contract is the actual product used to execute FX hedging.

Related FAQs

Who do I contact for help while signing up with Corpay? Can I book FX rates directly from my Instarem business account?  How can I lock FX rates?  What is the maximum duration I can lock an exchange rate for?  How does a forward contract work? How does locking an FX rate work?

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