The cross currency interest rate swap is an interest rate swap where groups of payments in various currencies will be carried out during a period of at least 1 year. The opposing parties will swap funds in two different currencies at the beginning and at the end of the transaction, and they will swap interest payments at a fixed exchange rate, set in advance, during the existence of the transaction. Within the transaction, the fixed rate of one currency may be swapped with the fixed rate of another currency, with the floating rate of another currency, or the floating rate of one currency with the floating rate of another currency – ”basis swap”. There may be no swap of funds at the beginning, or, less often, at the end of the swap. The exchange rate is fixed for the swapping of all payments.
The minimum amount for a cross currency interest rate swap is CZK 50 mil. or EUR or USD 1 mil. The duration of a currency interest rate swap can be from 1 up to 15 years.