What Is a Replacement Swap?
Foreign exchange swap (ForeignExchangeSwap) is that the two parties in the transaction agree to exchange a certain amount of currency B with currency A, and reverse the same amount of currency A with currency B at the agreed price in the future. Foreign exchange swaps are flexible and diverse, but are essentially interest rate products. One party who exchanges high-interest currency for the first time must inevitably compensate the other party. The amount of compensation depends on the difference in interest rates between the two currencies. The compensation method can be reflected by the exchange price when it expires or by paying the spread separately Form of reflection.
Foreign exchange swap
- Foreign exchange
- The client entrusts the bank to buy currency A, sell currency B, and determine the reverse operation in another working day in the future. Sell the same amount of currency A and buy currency B.
- Clients need to advance in advance for any reason after doing forward foreign exchange trading
- Foreign exchange
- RMB and foreign exchange
- The role of the RMB and foreign exchange swap business: It can be used for the early settlement of forward exchange sales and sales, which resolves the contradiction that forward exchange sales and sales cannot be delivered in advance, and makes the customer's fund turnover more flexible. Through swap business, customers can convert RMB and foreign exchange according to the agreed spot exchange rate and value date, and reverse the conversion according to the agreed forward exchange rate and value date. This can prevent exchange rate risks for customers The role of currency preservation.