Plain FX Forward

FX Swap

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

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Two deals with different directions and dates combined in one product

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Provides liquidity in a given currency

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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

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