FCY interest rate swap


It means that both transaction parties agree to periodically exchange interest sum, calculated per a nominal principal and agreed interest rate, during the swap period. The simplest rate swap refers to the payment of interest, calculated per fixed interest rate, by one party to the other and the payment of interest, calculated per floating interest rate, by the other party.


1.Evasion of rate risks: The customer may choose his/her preferred fixed interest rate or floating interest rate to evade rate risks and reduce financing cost according to his/her own judgment over future rate trend and financial needs. 2.Lower risks: The risks of this product are limited to the interest portion paid by both parties because the interchange of interest rates refers to no principal.

Conditions for application

Customers who meet the stipulations of related policies.

Interest rate swap price

The trade price shall be subject to the trade price at each branch of CGB.


XYZ City is awarded a 5-year loan of USD 20 million from World Bank at the cost of (3-month LIBOR+ 2.5%) for local poverty alleviation. They plan to repay capital with interest with financial revenue. To prevent the increase in cost arising form rising of LIBOR, the government of XYZ City decides to make interest-rate interchange, with the nominal principal of USD 20 million, with ABC Bank, (3-month LIBOR+ 2.5%) interchanging into 5-year fixed interest rate of 6.35%. After interchange of interest rate, the receipts and payment of capital by both parties are as follows: The government of XYZ City shall pay interest at fixed rate of 6.35% every 3 months for ABC Bank and ABC Bank shall pay floating interest at (3-month LIBOR+ 2.5%) of that time every 3 months for government of XYZ City, which may be able to pay the floating interest for World Bank.

In such cases, government of XYZ City may miss the benefit of falling interest rate, but it evades the risk of rising interest rate, which is an ideal option for government of XYZ City that relies on stable financial revenue.

Kind Reminders

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

Related Financial Instruments

FCY deposit interest rate

Inquiry at business outlets