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Currency Swap

Overview

The Currency Swap is an agreement under which ABC and customers exchange interest payment on equal principal amounts denominated in two different currencies. Principal amounts are exchanged at the beginning of the swap and re-exchanged at maturity, which may not be exchanged or re-exchanged depending on customers' needs.

Features

The Currency Swap helps our customers to control exchange rate risks over the medium and long terms and convert debts/assets denominated in one currency into debts/assets denominated in another currency, so as to avoid exchange rate risks and reduce costs.

For example, a firm having liabilities denominated in Japanese yen generates income flows only in US dollars, and the appreciation of yen will add to its debts. Therefore, the firm may lock the exchange rate through Currency Swap with ABC, so as to offset the appreciation of yen. Swap products provide a good liquidity. The customer can close positions in quick response to the market changes, enabling dynamic management of risks.

Procedures

1. The customer enters into the Master Agreement on Foreign Exchange Wealth Management with ABC and makes a request to ABC for Currency Swap.

2. ABC provides the customer with the Currency Swap solution and quotation.

3. The customer accepts the solution and submits to ABC the Letter of Authorization for Foreign Exchange Wealth Management.

4. When the transaction is closed, ABC and the customer sign the Customer Transaction Confirmation.
Note: Please contact your local branch for detailed information about the service.

Customer Service Center : 95599

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