Two parties agree to periodically pay each other interest in two different currencies based on nominal amount; in case there are principle exchange, fixed exchange rate agreed upon shall be applied
Introduction
Benefits
- Actively arrange an amount of foreign currency to meet future payment demand
- Flexible structure, matching client’s underlying transaction
- Mitigate risks of currencies and interest rate volatility, especially with mid and long-term transactions
Required Documents
Clients must provide documents of underlying transaction in accordance with applicable SBV regulations on interest derivatives
