8.12 (Mandatory - Deterministic) Defining Forecast Rate Scenarios

Forecast Rate Scenarios allow you to define your deterministic modeling scenarios including projections for future interest rates, future currency exchange rates, and future economic indicators. The cash flow engine uses interest rate forecasts to project cash flows, including pricing new business, repricing existing business, calculating prepayments, determining discount methods, and in determining rate-dependent forecast assumptions. The ALM process uses currency exchange rate forecasts to account for the effects of currency fluctuations on income.

The Forecast Rates Scenario rules use Interest Rate Codes, Currency Codes, and Economic Indicator Codes defined or stored in Rate Management, including all the active and reporting currencies and the primary, or functional, currency at your institution.

Defining a Forecast Rate Scenario is a mandatory step in setting up and configuring the Oracle ALM Application.