SWAPS : Foreign Currency Swaps (Back to school)

A swap can be defined as simultaneously purchase and sale of equivalent amount of base currency for 2 different maturities, essentially its a simultaneously borrowing and lending of 2 currencies between 2 banks for specific period express in the form of purchase and sell transactions. The interest rate differential payable or receivables by one of the parties is factored into exchange rates applied for the 2 components of transactions. Therefore the difference between Continue reading “SWAPS : Foreign Currency Swaps (Back to school)”