ACCA P4 AFM Advance Financial Management

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ACCA P4
Advanced Financial Management (AFM)
高级财务管理
ACCA Lecturer: Lily Wang




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, P4 Chapter 17 Content



1 Forex swaps


2 Currency swaps


3 Bilateral and multilateral netting and matching
agreement




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, 1.Forex swaps

 Characterstics
• In a forex swap, the parties agree to swap equivalent amounts of
currency for a period and then re-swap them at the end of the period at
an agreed swap rate. The swap rate and amount of currency is agreed
between the parties in advance. Thus it is called a fixed rate/fixed rate
swap
• The main objectives of a forex swap are:
• To hedge against forex risk, possibly for a longer period than is possible
on the forward market.
• Access to capital markets, in which it may be impossible to borrow
directly.
• Forex swaps are especially useful when dealing with countries that
have exchange controls and/or volatile exchange rates.



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, 1.Forex swaps

 Illustration 3




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