A currency swap involves the exchange of principal and interest in one currency for the same in another currency, often to reduce exposure to foreign exchange risk and interest rate risk.
The euro (€) is the currency unit of the European Union's eurozone, divided into 100 cents, and used by numerous EU member countries for trade and financial transactions.
Euro-Commercial Paper (ECP) is a type of short-term unsecured promissory note issued in a eurocurrency. Primarily centered in the London market, ECP offers a swift method for obtaining same-day funds, often used for cross-border financial transactions like those between Europe and New York.
Eurodollar bonds are bonds that pay interest and principal in Eurodollars, which are U.S. dollars held in banks outside the United States. These bonds are usually issued by foreign corporations or governments.
Eurodollars refer to U.S. dollars deposited in financial institutions outside the United States. The eurodollar market originated in London in the late 1950s, driven by the growing demand for dollars to finance international trade and investment.
A floating exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate due to market forces without direct governmental control. However, governments and central banks may intervene to stabilize the currency if necessary.
FX, or Foreign Exchange, refers to the global market where currencies are traded. It is one of the most liquid and largest financial markets in the world, encompassing all aspects of trading, buying, selling, and exchanging currencies at current or determined prices.
An international financial institution that provides loans and financial assistance for development projects in middle-income and creditworthy low-income countries, commonly known as the World Bank.
An international organization comprising 184 member countries, established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance-of-payments adjustment. The IMF, founded in 1945, is headquartered in Washington, D.C.
Government-owned pools of investment funds typically invested in foreign assets and funded by foreign currency reserves, derived from current account surpluses.
