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Suppose, a US exporter will receive 2500000 INR (Indian Rupees) in 90 days from an Indian Importer. The US exporter is expecting that USD (US
Suppose, a US exporter will receive 2500000 INR (Indian Rupees) in 90 days from an Indian Importer. The US exporter is expecting that USD (US Dollars) is going to appreciate from its present level of $1=65INR to $1=68 INR in 90 days. As a result, the US exporter enters into a Non Deliverable Forward (NDF) contract with a bank and fixes $1=65INR where he will be able to sell INR at this rate. If the spot rate becomes $1=67INR after 90 days, explain the mechanism of how this NDF contract will work for this US exporter in this scenario
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