By entering into a Currency Swap Agreement 1 Central Banks can exchange domestic curr...........

Economic Affairs Types of Banks and Banking

By entering into a Currency Swap Agreement:

1. Central Banks can exchange domestic currency with hard currency during their difficult Balance of Payments position.

2. Companies can hedge their future cash flow in foreign currency.

3. Countries can trade with their trading partners in terms of their domestic currency.

Which of the statements given above is/are correct?

3 only

1 and 2 only

1 and 3 only

1, 2 and 3

All the statements are correct.

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