Results for tag: "Currency Swap"

A currency swap is a foreign exchange transaction in which two parties exchange a given amount of one currency for an equal amount of another currency. It is a type of derivative instrument, and is used for hedging against currency risk, or for speculation. Currency swaps involve the exchange of principal and interest in one currency for the same in another currency. They are used to hedge against foreign exchange risk, or to take advantage of interest rate differentials between two countries. Currency swaps are typically used by large corporations and financial institutions to manage their foreign exchange exposure. They are also used by governments and central banks to manage their foreign exchange reserves. Currency swaps are typically traded over-the-counter, and are not traded on any exchange. Some of the major players in the currency swap market include Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, UBS, and Deutsche Bank. Show Less Read more