Forward Rate Agreements Po Polsku

Forward rate agreements po polsku: Understanding the basics

Forward rate agreements (FRAs) are financial instruments used by businesses and investors to manage their interest rate risk. In essence, an FRA is a contract between two parties, in which one party agrees to pay the other a certain amount of money on a future date, based on a predetermined interest rate.

In Poland, forward rate agreements are known as umowy terminowe dotyczące stóp procentowych. They are commonly used by banks, corporations, and institutional investors to hedge against the risk of interest rate fluctuations.

How do FRAs work?

Let`s say a bank expects interest rates to rise in the future, and it wants to lock in a lower rate for a loan it plans to make. The bank can enter into an FRA with another party, such as an institutional investor, to hedge against the risk of rising interest rates.

In this case, the bank would agree to pay the investor a fixed rate of interest on a predetermined date in the future, based on a specified notional amount. The fixed rate is known as the FRA rate. If interest rates rise above the FRA rate, the investor would pay the bank the difference between the FRA rate and the market rate. If interest rates stay below the FRA rate, the bank would pay the investor the difference.

FRAs are closely related to interest rate swaps, which are also used to manage interest rate risk. However, unlike swaps, FRAs are settled in cash rather than through an exchange of principal.

Why use FRAs?

FRAs are a flexible way to manage interest rate risk, especially for short-term transactions. They allow businesses and investors to lock in a fixed interest rate for a future period, which can help them avoid losses if interest rates rise. FRAs can also be used to speculate on interest rate movements, although this carries more risk.

In Poland, FRAs are subject to regulations by the Polish Financial Supervision Authority (KNF). This includes requirements for disclosure, documentation, and risk management.


Forward rate agreements po polsku, or umowy terminowe dotyczące stóp procentowych, are a useful tool for managing interest rate risk in Poland. By entering into an FRA, businesses and investors can hedge against the risk of rising interest rates and lock in a fixed rate for a future period. While FRAs carry some risk, they are a flexible and regulated financial instrument that can help manage uncertainty in the market.

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