Hara-Kiri Swap

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Hara-Kiri Swap

A swap offering no profit for the offering party. That is, a hara-kiri swap involves an interest rate or exchange rate so low that it is impossible for the originator to make a profit. In general, hara-kiri swaps are advantageous only if they build a client base or if they allow one to enter a profiting position that one could not have entered previously. Nevertheless, it derives its name from hara-kiri, Japanese ritual suicide, because it is seen as a slow death for a company.