Cross currency swap

A single contract to manage interest rate and FX rate risk

With a cross currency swap, you can hedge the interest rate and FX rate risks of your foreign currency loan.

With a cross currency swap, a company can swap the interest rate payments and instalments of a loan into another currency. For example, a loan in a foreign currency can in practice be changed into an euro-denominated loan with a cross currency swap, thus eliminating the FX rate risk. 

A cross currency swap is suitable, for example, for hedging the value of intra-group loans or a foreign subsidiary. Under the contract, interest rate payments and instalments are swapped at a predetermined exchange rate.

How does your business benefit from a cross currency swap?

• Hedges against interest rate risk by fixing the interest payable.
• Hedges the FX rate risk in interest rate payments, instalments and principal.