Product Overview

An RMB cross currency swap is a contract between a client and a bank, where the two parties agree to exchange principal amounts in RMB and a foreign currency at a predetermined exchange rate on the value date, and periodically exchange interest payments in the two currencies over a specified term, based on agreed-upon interest rate determination methods.

The structure of an RMB cross currency swap is flexible. The principal exchange can be arranged in various forms: exchanging principal both at the beginning and end of the term, exchanging at neither point, exchanging only once, or amortizing the principal during the term. Interest exchanges can also be customized, such as fixed rate for floating rate, fixed for fixed, or floating for floating.

Product Features

By entering into an RMB cross currency swap, clients can restructure their RMB and foreign currency debt or assets, lock in exchange and interest rate costs, flexibly adjust interest payment/receipt methods, and effectively hedge against exchange rate and interest rate risks.

Target Clients

This product is suitable for clients with foreign currency assets or liabilities who need to manage associated interest rate and exchange rate risks.

Application Procedures

Risk Tolerance Assessment: Clients must complete a risk tolerance assessment before trading. Bank of China can sell products to retail investors only if the products' risk ratings are equal to or lower than the investors' risk tolerance levels.

Account Opening and Agreement Signing: Before conducting any transactions, clients must open relevant accounts with BOC and sign derivative trading agreements.

Credit Facility or Margin Settlement: A sufficient credit line or corresponding margin is required.  

Transaction Application and Background Review: Clients must submit an authorized transaction application specifying all trade details. BOC will review the purpose of the derivative transaction and the client's actual demand to ensure that the risk characteristics of the client's underlying assets or liabilities match those of the derivative transaction.

Execution: Upon transaction completion, BOC provides the client with relevant trade confirmation documents.

Settlement: Both parties settle the RMB and foreign currency funds on the respective value dates according to the agreed transaction terms.

BOC Advantages

BOC is a market maker for all currency pairs in the interbank RMB foreign exchange market and has consistently been awarded the Best Renminbi-Foreign Exchange Market Maker by the China Foreign Exchange Trade System for multiple consecutive years. It provides clients with high-quality, efficient quoting and trading services.

BOC offers RMB cross currency swap quotes for a comprehensive range of currencies with tenors extending up to 10 years, meeting clients' diverse and long-term foreign exchange hedging needs.

BOC provides flexible and customizable RMB cross currency swap products. Key parameters such as day count conventions, interest rate benchmarks, and principal exchange forms can be tailored to best match clients' hedging needs for their RMB and foreign currency assets and liabilities.

Risk Disclosure

Before proceeding with the transaction, please read the risk disclosure statement to fully understand the terms and associated risks of the transaction. Potential risks may include, but are not limited to, policy, market, and liquidity risks.

The above content is for reference only. Specific product information is subject to BOC's official product documents.