4 Main Categories of Swaps | Contracts | Forex Management

The following points highlight the four main categories of swaps between corporate borrowers. The categories are: 1. Principal-Only-Swaps 2. Interest Rate Swaps 3. Currency Swaps 4. Carry Trade Swap. Category # 1. Principal-Only-Swaps: These are typically used for hedging loan transactions. If a corporate borrowers in Yen and wants to swap the loan into US$ or Rupee, it could opt [...]