Swap (Swap) Swap transaction refers to a transaction form in which both parties agree to exchange certain assets with each other in a certain period in the future. More precisely, he said, a swap transaction refers to a transaction in which both parties agree to exchange cash flows with each other in a certain period in the future. Common ones are currency swap and interest rate swap. Currency swap refers to the swap transaction between two currencies, generally referring to the exchange of capital and principal of two currencies. Interest rate swap transaction is a swap transaction between different interest rates of the same monetary fund, which is generally not accompanied by the exchange of principal. Swap trading, like futures and options trading, is one of the financial derivatives that have developed rapidly in recent years and has become an important tool for international financial institutions to avoid exchange rate risk and interest rate risk.

Interest rate swap and currency swap occupy a major position in swap transactions.

Currency swap (also known as currency swap) refers to the exchange between two debt funds with the same amount, the same term and the same interest rate calculation method, but with different currencies, and also the currency swap with different interest amounts. Simply put, interest rate swap is a swap between debts in the same currency, while currency swap is a swap between debts in different currencies. Currency swap parties exchange currencies, and their respective creditor-debtor relationships have not changed. The exchange rate of the initial swap is calculated according to the agreed spot exchange rate.

The purpose of currency swap is to reduce financing costs and prevent losses caused by the risk of exchange rate changes.

The conditions of currency swap are the same as those of interest rate swap, including the existence of overweight differences and opposite financing willingness, in addition to preventing exchange rate risks.