RMB/FX cross currency swap refers to a transaction whereby the Bank and a customer agree to exchange a specified amount of principal in RMB and a foreign currency within a specified period, and in the meantime exchange the interests of the two currencies swapped regularly. The said principal can be swapped in the following forms: 1) Both parties swap the principal in RMB and a foreign currency at the agreed exchange rate on the date when the agreement takes effect, and swap the principal of the same amount and at the same exchange rate in the reverse direction before the expiry date; 2) The principal in RMB and a foreign currency will not be swapped in effect on the date the agreement takes effect or the date it expires; 3) The said principal will not be swapped in effect on the date the agreement takes effect, but swapped before the expiry date; 4) Other forms prescribed by relevant authorities. Interest swaps mean the practice whereby both parties regularly pay the amount of interests calculated in their respective target currencies to the other party. The interest can be calculated either at a fixed rate or floating rates.
To apply for the RMB/FX cross currency swap business, customers shall enter into the Master Agreement for RMB-Foreign Exchange Swaps and RMB-Foreign Exchange Option Transactions, and abide by relevant regulations of China on foreign trade, customs and insurance (among others), as well as related provisions of the People’s Bank of China, CBIRC, and SAFE.
The same as RMB/FX spot and forward.