Swap

Avoid possible exchange losses when there are unfavourable fluctuations in the exchange rate and your foreign currency accounts payable and receivable are due on different dates.

A “currency swap” is a spot exchange transaction that’s carried out at the same time as a forward currency transaction for the same amount. The forward portion is the counterpart to the spot transaction, such that a spot transaction to buy will be offset by a forward transaction to sell. In order to make better use of your business cash flow, excess funds in one currency are temporarily converted into another currency. This protects your business against unfavourable movement in the exchange rate

Target clientele

• Businesses that have accounts payable and receivable in the same currency, but with different due dates

Advantages

• Better use of your business cash flow
• Excellent tool for cash flow planning
• Elimination of exchange loss risks due to mismatched inflows and outflows in foreign currencies as well as exchange rate fluctuations
• Spot exchange rates for buying and selling foreign currency set at the same time

Conditions

• Prior authorisation of line of credit required