FX Swap

Guarantee liquidity
without currency risk

In a FX swap, the client simultaneously buys and sells one currency to buy another currency, with both transactions having different values – one executed on the trade date and the other on a forward date. On the one hand, through the FX swap the client converts cash from one currency to another currency, thus providing short-term liquidity in a different currency, and on the other hand guarantees the exchange rate on the forward date.

Features of FX Swap

Two deals with different directions and dates combined in one product

Provides liquidity in a given currency

Guarantees the exchange rate for the reverse maturity transaction

Example: The client has USD 1,000,000 and wants to secure short-term liquidity in EUR, while after 3 months it has to make payments to suppliers in USD, worth USD 1,000,000. For this purpose, it concludes a currency swap with the following two legs:

1st leg, 01.09.2021: The client sells 1,000,000 USD and buys EUR at the rate of 1.1817
2nd leg, 30.11.2021:The client buys 1,000,000 USD and sells EUR at the rate of 1.190