Which of one the following statement is true regarding currency swaps ........

Economic Affairs Financial Markets

Which of one the following statement is true regarding currency swaps?

It is an agreement between business community and central bank of a country to maintain adequate foreign currency in circulation.

It is a foreign-exchange agreement between two institutions/banks to exchange the principal or interest payments of a loan in one currency for equivalent loan in another currency.

Currency swaps are government securities which are negotiable.

Non of the Above

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Explanation:

Third option is correct i.e. Currency swaps are government securities which are negotiable.
A currency swap (or a cross currency swap) is a foreign exchange derivative between two institutions to exchange the principal and/or interest payments of a loan in one currency for equivalent amounts, in net present value terms, in another currency. Currency swaps are motivated by comparative advantage.