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.
7 trillion in foreign exchange swaps
, forward contracts and futures--with futures the smallest component.
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
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;