A currency swap is an exchange of payment flows comprising interest payments and capital payments in different currencies at an agreed exchange rate.

You can use currency swaps to hedge possible currency risks. They also allow you cheaper access to the respective foreign currency markets.

• In a currency swap, you exchange fixed and variable interest rates in any combination against each other. Possible combinations are:

• Payer
• Receiver
• Basis
• Fix to fix.

• Although it is not absolutely necessary to swap the nominal amounts at the start of the transaction, this provides a basis for calculating the respective interest amounts. The original amount can be swapped back again upon maturity at the original exchange rate. The necessary periodic adjustments of the reference interest rate are made either manually or automatically via a separate entry.