Foreign exchange swap

(redirected from cross-currency swap)

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.
Mentioned in ?
References in periodicals archive ?
The company simultaneously executed a cross-currency swap to Canadian dollars to cover its currency risk on the US denominated Notes.
Additionally, the majority of net cash flow from the transaction is expected to be hedged with a GBP / cross-currency swap, which is expected to minimize Realty Income's exposure to foreign exchange rate fluctuations.
The issuer entered into a cross-currency swap to hedge the currency risk.
'In addition, the government should evaluate the possibility of becoming a party in funded cross-currency swap agreements with multilateral development institutions, or highly-rated private financial enterprises, to finance infrastructure,' it added.
Cross-currency swap (currency swap or a basis swap) : A cross-currency swap is a foreign exchange swap that also involves the exchange of streams of interest payments in different currencies for an agreed period of time.
"We are delighted to continue our collaboration with IIFM by jointly launching the Islamic cross-currency swap standard product template.
It printed a 3.25 per cent five-year dollar bond at 150 bps over midswaps last November; taking into account the cross-currency swap rate and the fact that the tenor of its latest bond is two years longer it paid a premium of roughly 35 bps to sell this week's bond said a source close to the deal.
After considering a number of alternatives, the CFO decides to utilize a cross-currency swap to hedge its exposure.
Further, Taiwan is currently in talks with Beijing on a cross-currency swap agreement.
At the start of June, the AfDB and IFC signed an agreement on cross-currency swap transactions to ease bond issuance and lending in African currencies.
There are also many forms of cross-currency swap, in which the first party pays in one currency and the second pays in another.