The world of finance and banking is changing. Every decade there is something new in the banking and money-related industries or old traditions are being carried forward with some more modification. Cross currency in finance is known as a derivative for an interest rate. It is an agreement between two parties or companies to exchange interest payments and principal between two different currencies. At fixed intervals of the life of the agreement, interest payments are exchanged.
These are highly customisable. If the exchange rate is locked in, there are still opportunities like costs/gains as the exchange rate keeps changing. This could result in the locked-in rate which is after the transaction occurs. At the end of the agreement, the parties have to swap back the currencies at the same exchange rate. Swaps give the borrower flexibility in the bank i.e they separate the funding source of the borrower from the interest rate risk which allows the borrower to secure funds to meet their needs. It also gives the borrower the chance to create a swap culture.
DBS SME Banking makes currency swaps for both parties very easy. They make banking invisible to a person which means it’s carefree. They are known to be Asia’s safest and the world’s best bank. They believe in fair dealing, cyber security and preventing all kinds of cyber crimes.
DBS has recently entered the MAS bilateral currency swap. After completing the drawdown of the facility they planned on providing RMB financing to the customers.
How does cross-currency swap work at DBS?
One can choose to pay in a different currency either by fixed or floating rate.
Benefits and features of DBS:
- Customisation – They customise cross-currency swap for one’s needs and interest rate risk.
- Competitive Pricing – One gets to enjoy the market leader position benefits of this bank.
- Leverage Their Expertise- Their dedicated corporate advisory team helps against market volatility.
- Certainty In Volatility – Business decisions are made easier with fixed exchange and interest rates.
- Take advantage of market dynamics: This is very useful for cross-border transactions.
To conclude, currency swaps are a very important and interesting financial derivative in the banking industry and this fast-changing world. They also bring people together because it involves swapping currencies of two different countries. DBS has always been on the top, maintaining its position of being the world’s best bank and providing equally good services for cross-currency exchange.