Share your insights or perspective on the financial matter presented in the input.

Why are currency forwards needed?
What is the point of this? Can't I achieve the exact same effect and   outcome by exchanging currency now and put that amount of USD in a   bank account to gain some interest, then make the payment from one   year from now? This is for companies, not individuals. Companies usually take loans, because they think they can make more money (e.g. 10%*) than the interest on the loan (e.g. 5%*). Putting money on a bank account to earn interest there would give them even less (e.g. 1%*). So with your option, instead of earning 10%* interest, they'd earn 1%* interest. If the cost of the currency forward is less than these 9%* difference, the forward saves them money. If they have excess cash and they don't know how to invest that money, your option may be preferable *Simple numbers chosen for simplicity, not accuracy.