Currency swap is a swap that involves the exchange of principal and interest in one currency for the same in a different currency. It is measured to be a foreign exchange deal and is not needs by law to be exposed on an institution’s balance sheet. A currency swap is a foreign exchange contract between two companies to exchange aspects, generally the major or interest payments of a loan in one currency for the same aspects of an equivalent in net present value loan in a different currency.
Currency Swap Definition
