The exchange rate between two currencies that is anticipated to prevail in the spot market on a given future date. It differs from the current spot rate primarily by the extent to which inflation expectations in the two currencies differ.

How do you find the expected spot rate?

The expected future spot rate is calculated by multiplying the spot rate by a ratio of the foreign interest rate to the domestic interest rate: 1.5339 x (1.05/1.07) = 1.5052.

What is the difference between cash rate and spot rate?

A “spot rate” is one at which a deal is settled in the second working day of the transaction (T+2). … The difference between spot and cash rate is called cash-spot spread. Usually, the per day discount works out to be not more than 1-1.5 paise per day.