Non-deliverable foreign exchange forward is also a foreign exchange forward transaction, but the difference is that the currency of one side of the foreign exchange transaction is not convertible. This is an over-the-counter foreign exchange derivative. When the contract expires, only the difference between the forward exchange rate and the actual exchange rate needs to be settled. The settlement currency is a freely convertible currency (generally USD), and there is no need to deliver NDF principal (restricted currency), which has nothing to do with the principal amount and actual revenue and expenditure, and will not affect the future cash flow of the enterprise. Non-deliverable foreign exchange forward transactions generally use the currency of countries that implement foreign exchange control, which provides a hedge and investment channel for enterprises and investors facing exchange rate risks.