The Currency war is on

I always like to be bullish on things but you cannot avoid he ground realities and say bullish. The Europe’s politicians euro_2453852bjoin a chorus of policy-makers across the globe pushing for devaluations to fight for market share we can expect currency conflicts.

The telegraph reported –  Jean-Claude Juncker, EuroGroup chief, has signaled that Europe is no longer willing to be the last economic player holding the toxic parcel of an over-valued exchange rate, describing the euro as “dangerously high” after its three-month surge against the dollar, yuan and yen. Continue reading “The Currency war is on”

SWAPS TYPES – (Back to school)

English: Currencies exchange logo Français : L...

Continue from my last post Swaps try to understand the types of swaps :

  1. Swap in transaction: In such transaction the base currency is bought for near delivery & sold for forward delivery
  2. Swap out transactions : In such transaction the base currency is sold for near delivery & bought for forward delivery.
  3. Forward Swaps: In such transactions both the purchase and Sell transactions Continue reading “SWAPS TYPES – (Back to school)”

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)”

Risk Faced by Banks in foreign currency dealings !! – (Back to School)


RISK is a four letter word and have many definitions in different aspects. In the financial context it can be described as the probability of not achieving targeted financial performance.

Although all the business carry risk but the international business carry few additional risk exchange rate and interest rate.
Among the various participants in the foreign market the risk is faced by end users who initiate the transactions a commercial banks who provide committed rates to their Continue reading “Risk Faced by Banks in foreign currency dealings !! – (Back to School)”