It means that the customer and the bank enter into an agreement on term, exchange rate, currencies, sum and direction. Both parties make a RMB/FCY settlement at the agreed exchange rate at the beginning of term and agree to make a reverse settlement at another agreed exchange rate at the end of term. It may be considered as a combination of a spot purchase (or sale) of exchange and a forward sale (or purchase) of exchange.

1.Hedging: Existing currency may be exchanged into currency with high interest rate through FCY-FCY swap transaction to realize effective use of capital with high interest rate and value preservation and increase of foreign exchange. 2.Adjustment of cash position: FCY-FCY swap transaction may be used for fixing swap cost, evading risk of interest rate and solving the problem of shortage in RMB/FCY cash flow. For example, if a customer holding HKD needs to use USD, but he/she does not wish to directly exchange HKD into USD. Therefore, the customer may use USD within the swap term through swap business without undertaking the risk of exchange rate and exchange the USD into HKD at the formerly agreed rate upon maturity of swap. 3.Adjustment of cash flow date: Maturity date for forward exchange transactions may be adjusted, which means extension or early ending of settlement date, through FCY-FCY swap transaction of the same sum and reverse direction.

Conformance with relevant policies and regulations

Near-end transaction rate = spot exchange rate, far-end transaction rate = spot exchange rate¡À premium/discount points. The trade price for this shall be in conformance with the trade prices of all the branches.

The customer makes a 6-month USD/HKD swap transaction (38 points of USD/HKD premium in 6 months) due to cash position. Both parties agree that the Bank will sell USD 1 million at the rate of 7.8000 and buy HKD at spot (January). In addition, the Bank will buy USD 1 million from the customer at the rate of 7.8038 (7.8000 + 0.0038) and sell HKD in July (6 months later) as agreed. The two transactions of foreign exchanges are equal in sum (for USD, not HKD), opposite in direction and different in value date. The customer owns the right of using USD during this period without assuming the exchange rate risks of HKD.

Business Outlets

Capital transaction credit line by CGB is required for the transaction of this service. For application of capital transaction credit line, please contact the relationship manger of the local branch.

RMB/foreign exchange rate

FCY deposit interest rate

RMB deposit interest rate

Inquiry at business outlets