Product Overview

An RMB foreign exchange swap is an agreement between a client and the bank, involving two exchanges of RMB and a foreign currency for the same principal amount but in opposite directions, at different exchange rates, on two different value dates (the near leg and the far leg). Based on the direction of the initial exchange, the transaction can be structured as either a Near Leg Foreign Exchange Sale and Far Leg Foreign Exchange Purchase or a Near Leg Foreign Exchange Purchase and Far Leg Foreign Exchange Sale.

Product Features

By entering into an RMB foreign exchange swap, clients can simultaneously lock in the exchange rates for converting foreign currency at both the beginning and the end of the period, thereby hedging against exchange rate fluctuation risk.

This product allows clients to flexibly manage their RMB and foreign currency funding, improving the efficiency of RMB and foreign currency utilization. It meets clients' needs for managing maturity mismatch risks between their RMB and foreign currency positions.

Target Clients

This product is suitable for clients with maturity mismatches between RMB and foreign currency funds and requirements for exchange rate risk management.

Application Procedures

Risk Tolerance Assessment: Clients must complete a risk tolerance assessment before trading. Bank of China may provide products to retail investors only when the product risk rating does not exceed the investor's risk tolerance level.

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

Credit Facility or Margin Settlement: Clients must have sufficient credit lines or margin in place to conduct transactions.

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 underlying business needs to ensure that the risk characteristics of the client's underlying assets or liabilities are consistent with those of the derivative transaction.

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

Settlement: Both parties settle the RMB and foreign currency funds on the respective value dates in accordance with the agreed-upon transaction terms.

BOC Advantages

BOC is a market maker for all currency pairs in the interbank RMB foreign exchange market and has been awarded the Best Renminbi-Foreign Exchange Market Maker by the China Foreign Exchange Trade System for multiple consecutive years.

BOC offers RMB foreign exchange 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 multiple channels for RMB foreign exchange swap transactions, including branch counters and corporate electronic trading platforms, offering clients efficient and convenient quoting and trading services.

Risk Disclosure

Clients should carefully read the relevant risk disclosure statement before conducting transactions under this product, ensuring they fully understand and accept the transaction terms and associated risks. Risks faced by clients may include, but are not limited to, policy risk, market risk, and liquidity risk.

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