A foreign currency swap, commonly known as an FX swap, isan agreement between two foreign parties to exchange currencies. The agreement entails exchangingprincipal and interestpayments on a loan in one currency for principal and interest payments ona loan in another currency of equal value.

When a trade is held open overnight, a swap rate is creditedor debited as a rollover interest rate.When a position isrolled over,the swap rate is credited or debited once for each day of the week.