---
title: "What is Islamic FX forward? | IslamicOpenFinance™"
description: "A currency hedge built on a binding promise to exchange at an agreed rate on a future date, with the exchange itself done at spot."
url: https://islamicopenfinance.com/glossary/islamic-fx-forward/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Treasury, liquidity and hedging](https://islamicopenfinance.com/glossary/#treasury)

Treasury, liquidity and hedging

# Islamic FX forward

A currency hedge built on a binding promise to exchange at an agreed rate on a future date, with the exchange itself done at spot.

An Islamic FX forward fixes the rate for a future currency exchange without a conventional forward contract. One party gives a binding wa'd to exchange currencies at an agreed rate on a set date, and on that date the exchange is executed as a spot transaction. ISDA and IIFM publish templates for two versions: a single binding wa'd structure and a structure of two unilateral and independent wa'ds.

## Sources

- [IIFM, Published Standards: ISDA/IIFM Islamic Foreign Exchange Forward (IFX Forward)](https://www.iifm.net/standards/published-standards)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Wa'd (promise)** A unilateral promise to do something in the future; it can be made binding and is used in hedging, sukuk and lease-to-own deals.](https://islamicopenfinance.com/glossary/wad/) [**Bay al-sarf (currency exchange)** An exchange of money for money, of the same or a different currency, which must be settled on the spot.](https://islamicopenfinance.com/glossary/bay-al-sarf/) [**Muwaadah (mutual promise)** An exchange of promises between two parties for the same future transaction, treated more restrictively than a unilateral wa'd.](https://islamicopenfinance.com/glossary/muwaadah/) [**Tahawwut (hedging)** Hedging; in Islamic finance, risk management transactions built from permissible contracts rather than conventional derivatives.](https://islamicopenfinance.com/glossary/tahawwut/)

**Treasury, liquidity and hedging**

1. [Commodity murabaha](https://islamicopenfinance.com/glossary/commodity-murabaha/)
2. [Wa'd (promise)](https://islamicopenfinance.com/glossary/wad/)
3. [Muwaadah (mutual promise)](https://islamicopenfinance.com/glossary/muwaadah/)
4. [Tahawwut (hedging)](https://islamicopenfinance.com/glossary/tahawwut/)
5. [Islamic profit rate swap](https://islamicopenfinance.com/glossary/profit-rate-swap/)
6. [Islamic cross-currency swap](https://islamicopenfinance.com/glossary/islamic-cross-currency-swap/)
7. [Interbank investment wakalah](https://islamicopenfinance.com/glossary/interbank-investment-wakalah/)
8. [Collateralised murabahah](https://islamicopenfinance.com/glossary/collateralised-murabahah/)

[All 221 terms](https://islamicopenfinance.com/glossary/)