Forward Swap

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Forward Swap

An agreement between two investors to swap assets, interest rates, or almost anything else on a set date in the future. A forward swap exists in order to provide investors with flexibility in accomplishing their investment goals; for example, the counterparties may wish to use a swap to hedge their risk, but are willing to accept the risk for the first year of an investment. A forward swap can consist of more than one swap: for example, the counterparties can agree to swap interest rates beginning in six months and then to swap different interest rates a year after that.
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The statement said,'Instruments such as forward swaps and balance of payment support are used by central banks and governments all over the world to strengthen their foreign exchange reserves position.
These reserves are inclusive of $6.6 billion of forward swaps.
He explained the government had been able to disguise the amount of additional borrowing required, in part through the creation of what was described as a "secret negative forward book", to re-acquire foreign exchange through "forward swaps" worth around $12.5bn.
The government borrowed cash to buy back foreign exchange through "forward swaps" worth around $12.5billion.
Also, the government has met targets on net international reserves, including forward swaps and borrowing from the central bank.
We have yet to discuss forward swaps, cross-collateralization, cross-defaults, embedded swaps, mark-to-market valuations, or the twenty-eight page ISDA Master Agreement.
(2006), Olivier and Jeffery (2004), Smith (2005), and Cairns (2007) to derive a consistent framework for pricing a wide range of linear survivor derivatives, such as forwards, basis swaps, forward swaps, and futures.
Thus, [[pi].sub.forwardswap]--the risk premium for the forward swap contract--must equal the weighted average of the individual values of [[pi].sub.n] used in the replication strategy.
It will offer broker services for trading of sukuks (Islamic equivalent of bonds), inter-bank money market transactions by murabaha (commodity-based Islamic finance); credit default swaps (CDS) and global currency products such as foreign exchange and forward swaps.
(13) The dependent variable in the regressions is the monthly change in the interest rate on one-year forward swaps for settlement one year ahead (a proxy for short-term wholesale interest rates), and the comparably transformed interest rate on one-year forward swaps for settlement five years ahead (as a proxy for long-term) wholesale interest rates.
In the regressions above, we obtain similar statistical results regardless of whether we regress five-year Treasury rates on forward Treasury rates or forward swaps rates.
The proposals fell into three major categories: forward swaps, forward bonds and tender programs.

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