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Appreciation of a currency is not good for the swap bank

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Reference no: EM132413522

Assume that the swap bank does not charge commission.

In a basic currency swap, what happens to the swap bank if the currency appreciates (i.e. the spot rate increases). Remember that the swap bank is who faces the risk in this transaction, and generally, appreciation of a currency is not good for the swap bank.

Reference no: EM132413522

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