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Currency Swap

Swap or swap transactions can be performed within the scope of a financial markets client agreement. In a swap transaction the client and the bank agree to exchange one currency for another currency at a certain rate (spot rate). The agreement also stipulates to re-exchange the same amounts at a certain future date also at a certain rate (swap rate).

A swap deal can be used if you have a currency, which you do not need before a certain time, but at the same time have a short-term need for another currency For example, you can exchange US dollars for euros for a term of one month. A swap deal will cover the currency risk, since when selling dollars at a spot rate, it simultaneously fixes the repurchase rate of the dollar. Otherwise after one month you would have to repurchase the dollars at a spot rate, which might significantly vary from the rate at which the dollars were sold.

The income/expense of a swap is determined with points, calculated on the basis of the difference of the interest rates of the currency pair.

Swap deals are used for managing currency risks, postponing the term of forward-deal and optimising financing.

Transactions can be concluded with Treasury on business days from 9 a.m. to 5 p.m. by calling 665 6610.

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