Derivatives
Currency Swap
Definition
What is Currency Swap?
A swap exchanging principalThe original amount of money invested or lent, excluding later returns. and interest payments in different currencies.
Example in practice
How This Looks in Practice
A company swaps naira obligations for dollar obligations.
Keep learning
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.