Currency Swap Agreement Upsc

Themes: Economy • Ministerial decisions • Currency swap • Economy • India-United Arab Emirates • National themes: balance of payments • Bank of Japan • Bilateral Exchange Agreement • Monetary Surveillance • RBI • Reserve Bank of India • Yen A foreign exchange swap has two types of transactions – a spot transaction and a futures transaction – which are executed simultaneously for the same quantity and which, therefore, balance each other. Foreign exchange transactions occur when both companies have a currency that the other needs. It avoids negative currency risk for both parties. Foreign exchange spot transactions are similar to foreign exchange transactions in the manner in which they are agreed; However, they are scheduled for a certain appointment in the very near future, normally in the same week.