Currency Swap

What is a Currency Swap?

A currency swap involves exchange of principal and interest in one currency for the same in another currency. It is considered to be a foreign exchange transaction.
For example: Suppose a Foreign company needs to acquire Indian Rupees and India-based company needs to acquire US dollars. Then these two companies could arrange to swap currencies by establishing an interest rate, agreed upon amount along with a common maturity date for the exchange.
Major Currency Swap arrangements of India:
  • Under BRICS
  • With UAE
  • With Japan



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