Foreign exchange swap

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Foreign exchange swap

An agreement to exchange stipulated amounts of one currency for another currency at one or more future dates.

Foreign Exchange Swap

An agreement between two parties to exchange two currencies at a certain exchange rate at a certain time in the future. For example, if a company knows that it will need British pounds in the future and another company knows that it will need U.S. dollars, they agree to swap the two at the agreed-upon exchange rate. This eliminates the risk that the exchange rate will change in a way that is disadvantageous to one party or the other. They are also called currency swaps. See also: Swap.
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FX benchmark rates, such as the WM/R Rates, are used for pricing of cross-currency swaps, foreign exchange swaps, spot transactions, forwards, options, futures and other financial derivative instruments.
Most notably, Switzerland did so before 1998 through foreign exchange swaps, a technique explained below (AR 2009, p.
The treatment of foreign exchange swaps and forwards remained unclear for more than two years after the passage of Dodd-Frank, until the Treasury issued an exemption for such products in November 2012 (U.
In contrast, turnover for foreign exchange swaps increased again, rising by 12%, while turnover for forward rate agreements rose by 4%.
Late in the month, the Treasury Department ruled that foreign exchange swaps and forwards used by U.
dollar or other currencies via the foreign exchange swaps market, it said.
Specifically, he says, "I hope the Committee will not only include the exemption of foreign exchange swaps and foreign exchange forwards included in other proposals but would also consider exemption for single currency interest rate swaps and commodity swaps less than 12 months.
The central bank said that it would hold regular forex auctions of foreign exchange swaps and credit line repurchases in order to provide hedge and liquidity to the local market.
Nakaso said a growing number of foreign banks have raised yen funds in Tokyo money markets before converting them into their home currencies via the foreign exchange swaps market.
The unusual transactions have become possible as foreign banks can raise yen through foreign exchange swaps at lower rates.
average daily volume in over-the-counter foreign exchange instruments (including spot transactions, outright forwards, foreign exchange swaps, and options) totaled $577 billion;

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