Non-deliverable forward contracts (NDFs) are frequently used for currencies in emerging markets.

Question

Quizplus · Accepted Answer

Non-deliverable forward contracts (NDFs) are commonly used for currencies in emerging markets because they allow investors to hedge their currency risk without actually needing to physically exchange the currency. This is particularly useful in markets where there are restrictions on foreign exchange transactions or where the currency is not widely traded.

Non-Deliverable Forward Contracts (NDFs) Are Frequently Used for Currencies in Emerging