Non-deliverable forward
A forward under which no currency is delivered: the parties settle the difference between rates.
How to read the number
It allows hedging a currency that is hard to obtain: the movement of the rate is reproduced through settlement in another, freely available currency.
When the metric lies
The settlement rate comes from an outside source. If its publication stops or its methodology changes, the contract is left without an agreed point of reference.
Also known as: NDF contract