Foreign exchange swap

(redirected from Cross-Currency Swaps)

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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The electrical power generation company said cross-currency swaps have been put in place for 2023, which means the notes will have an effective interest rate of 4.74% per annum.
Interest rate risk is mitigated by cross-currency swaps, which were entered into at closing between the bond issuer and swap providers.
Bankdata recently migrated interest rate and cross-currency swaps from its legacy systems to Murex's MX.3 platform, the solution for trading, risk management and processing for the capital markets.
Of the $10 billion, too, $5.4 billion is from an International Monetary Fund loan while $2.5 billion comprise cross-currency swaps; hardly our own money to spend.
Currently, of the $10 billion that makes up Pakistan's forex reserves, Rs5.4 billion is from an IMF loan while Rs2.5 billion comprises cross-currency swaps.
"AIIB has plans to expand the operations it can support by analyzing, piloting, and building up local currency capabilities, both in terms of cross-currency swaps as well as capital market borrowings," said Ostfield.
Cross-currency swaps are being increasingly used to offset both exchange rate and interest rate risks with daily global transactions in the range of $50bn to $60bn.
When banks raise funding offshore, they swap this funding back into NZ dollars using FX swaps and cross-currency swaps, hedging the foreign exchange risk.
His team works with clients to design effective hedging strategies, utilizing foreign exchange options and cross-currency swaps. His group also specializes in foreign exchange-related accounting issues and quantitative analysis.
Depending on whether the companies planned to use the funds overseas or bring them back to the U.S., some have turned to cross-currency swaps to hedge that exposure, Gaylor said.
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.