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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15) By entering into a foreign exchange swap, the Bank is able to influence the level of settlement cash with some certainty (in contrast to an OMO which can leave the level of settlement cash at undesired levels if un-bid or under bid).
Afreximbank President Benedict Oramah said "the facility could operate either as an allocation of trade finance lines of credit to key state-owned commercial banks based on a list of import letters of credit" with them, or as "a foreign exchange swap arrangement with the CBE under which Afreximbank would fund the CBE with U.
For example, a transaction that is willfully structured as a foreign exchange forward or foreign exchange swap and qualifies for an exemption from substantive regulation by the CFTC, but with the sole intent to evade any CFTC requirement, may be deemed by the CFTC to be a regulated swap.
Islamic foreign exchange swap is a contract that is designed as a hedging mechanism to minimise market participants' exposure to volatile and fluctuating market of currency exchange rates.
6 trillion foreign exchange swap market should be regulated led to a compromise--Dodd-Frank included 'foreign exchange swaps' and 'foreign exchange forwards' in the definition of 'swap', making these instruments subject to the CFTC's jurisdiction, but allowed the Treasury Secretary to exempt these products from the clearing and trading mandates of the swaps regulation.
Japan cancelled a finance ministers meeting scheduled for this month and said it would review a foreign exchange swap agreement with Seoul, as the rift threatened to spill over into economic ties.
Reinstating the foreign exchange swap line by the Federal Reserve has helped contain dollar funding strains experienced by European banks.
To address this issue, a new foreign exchange swap facility was established on 20 October.
The central bank also said it would offer a foreign exchange swap facility with a one-month maturity.
This development precipitated the near collapse of the foreign exchange swap market and the precipitous decline of the spot exchange rate.
The Federal Reserve and counterparts in Europe, Canada and Britain announced joint action - the Fed launched a temporary facility to let a wider number of banks borrow at favourable rates, and catered for affected foreign institutions via foreign exchange swap lines with the ECB and Swiss National Bank.
Main Features of China's Foreign Exchange Swap Market

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