"Non-deliverable forward": (NDF). A foreign currency financial derivative contract. An NDF differs from an outright foreign currency forward contract in that there is no physical settlement of two currencies at maturity. Rather, a net cash settlement is made by one party to the other. NDFs are commonly used to hedge foreign currency risks in emerging markets where local currencies are not freely convertible, or where there are restrictions on capital movements. An NDF market might then develop in an offshore financial centre, with contracts settled in major foreign currencies, such as the US dollar.