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CORPORATE AND INSTITUTIONAL GLOSSARY


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C
Current TermCurrency Swaps
Currency Swaps
A way for a corporation with recurring cash flows in a foreign currency, or one seeking financing in a foreign country, to eliminate exchange rate risk. With a currency swap, you simultaneously purchase and sell a given currency at a fixed exchange rate and then re-exchange those currencies at a future date allowing you to convert a stream of cash flows in one currency into another currency at a fixed exchange rate.