Foreign exchange swap(redirected from Currency Swaps)
Foreign exchange swap
An agreement to exchange stipulated amounts of one currency for another currency at one or more future dates.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved