Currency swaps are often used to provide long?term financing in foreign currencies because
A) long?term capital markets are not well developed
B) long?term forward foreign exchange markets are absent
C) of high foreign taxes
D) a and b only

Question

Quizplus · Accepted Answer

Currency swaps enable long-term financing in foreign currencies by exchanging the principal and interest payments between the parties. This is often done when long-term capital markets are not well developed or when long-term forward foreign exchange markets are absent. Therefore, options A and B are correct, and option C is not relevant in this context.

Currency Swaps Are Often Used to Provide Long?term Financing in Foreign