For instance, with a simple forward contract concluded today one can buy or sell the euro in December 2010 for about 108 dinars with certainty – irrespective of what the actual dinar exchange rate is going to be in December.
Sure, with such a contract buyers of Euros will be disappointed, if the actual exchange rate in December turns out to be 104 and delighted when it is 112. But the contract gives them certainty. Such contracts greatly facilitate cash flow and liquidity management.