The two parties agree to exchange A for A certain amount of currency B, and exchange the same amount of currency A with currency B at A agreed price at A agreed date in the future.
Swaps come in a variety of flexible forms, but are essentially products.
Foreign exchange swap is a kind of financial swap.
Financial swap, also known as financial swap, refers to the exchange of a group of funds between the two parties in a certain period of time in accordance with the conditions agreed in advance, such as interest rates, to achieve the purpose of avoiding risks.
Swaps provide a powerful tool for hedging medium – and long-term exchange rate and interest rate risks by combining, and capital market hedging operations.
As an effective risk management method, the object of swap can be assets or liabilities;
It could be principal or interest.
