currency swaps belong to the category of financial derivative swap contracts, an English term that means exchange and allows us to clearly identify the object of these contracts.
In particular, with the currency swap contract the parties undertake to exchange with each other at the initial date of the contract two sums of money (defined as notional).
The sums are denominated in different currencies with the commitment to carry out a new and opposite exchange operation at the expiry of the contract under the same initial conditions and in particular at the same initial exchange rate
Each party, while having a currency swap contract in its assets, opens two opposite positions: a long one for the activity that generates active interest and a short one, for the activity that generates passive interest.
