Derivatives
Cross-Currency Swap
Definition
What is Cross-Currency Swap?
A currency swapA swap exchanging principal and interest payments in different currencies. that exchanges cash flows and often principalThe original amount of money invested or lent, excluding later returns. in two different currencies.
Example in practice
How This Looks in Practice
A borrower obtains dollars while paying naira-linked cash flows.
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Related Terms
Derivatives
Derivative
A contract whose value depends on an underlying asset, rate, index, or event.
DerivativesUnderlying Asset
The asset, rate, index, or reference on which a derivative's value is based.
DerivativesNotional Amount
The reference amount used to calculate derivative payments, which may exceed the cash initially exchanged.
Derivatives StrategiesCovered Call
A strategy that owns the underlying asset and sells call options against it.