I am trying to link these two questions together
Pricing a regular FX forward This is a contract (say USD vs JPY) where you exchange 2 currencies at maturity at a pre-determined rate, while no exchange happens today.
Pricing an Non- Deliverable FX forward This is a contract (Say USD vs TRY) where you exchange the net payment in a deliverable currency (USD) generally, instead of exchanging 2 currencies.
For a deliverable currency( say USDJPY case), the price of the contract should not change even if the contract calls for settling the net payment in USD instead of exchanging USD vs JPY.
But from second link, it seems that price of a non-deliverable FX forward is equal to a regular FX forward multiplied by some adjustment term.
Is there a reason why settling net payment in USD vs exchanging both currencies would lead to different prices?