A foreign exchange spot transaction, also known as FX spot, is an agreement between two parties to buy one currency against selling another currency at an agreed price for settlement on the spot date, which in most cases is 2 days. This is used when you need to make the payment immediately.
Forward Exchange Contract (FEC)
A Forward cover or contract is an agreement between two parties to buy or sell a currency at a specified price on a future date. It is particularly suited for hedging of future transactions due to its customizable nature, be it amount or delivery date.