Forex Swap

Forex Swap
It is described as a simplest kind of money swap. This can also be described as the agreement between the two parties to transfer a certain amount of a currency for a similar amount of other currency depending on the existing rate. The two different parties will then offer the actual amounts swapped on a date at a forward rate. This rate gets locked in the rate of exchange in which money will be exchanged in future, while setting any changes in the rate of interest of respective currencies. Therefore, it makes a hedge for the parties against exchange rates of the currency and potential fluctuations.