The forward market plays an important role in the global economy as it allows businesses and investors to manage their foreign exchange risks by locking in a future exchange rate. This reduces uncertainty and helps them to plan their future cash flows and investments more accurately.

The ability to manage foreign exchange risks is particularly important for businesses that operate internationally, as they are exposed to currency fluctuations that can affect their profitability. For example, a US-based business that sells products in Europe will receive revenue in euros, which they will eventually need to convert to dollars. If the euro depreciates against the dollar during that time, the business will receive less revenue than expected, which can impact their financial performance.