What is a basic swap? Thank god, help me.
Basis Swaps Basis Swaps, also known as "basis swap" and "basis swap", are interest swaps between floating interest rates of the same currency based on different reference interest rates, that is, the floating interest rate of one reference interest rate is changed into another reference interest rate. In the basic interest rate swap transaction, both parties pay and collect interest at two different floating interest rates. A study on the feasibility and market construction of RMB interest rate swap in China, in which the interest amounts of the two floating interest rates are calculated on the basis of the same nominal principal. Author: Bi Peng (Senior Director of Finance Department of Shanghai Futures Exchange).