An arrangement in which two parties Exchange specific amounts of different currencies initially, and a Series of Interest payments on the initial Cash flows are exchanged. Often, one Party will pay a fixed Interest rate, while another will pay a floating Exchange rate (though there may also be fixed-fixed and floating-floating arrangements). At the Maturity of the Swap, the Principal amounts are exchanged back. Unlike an Interest rate swap, the Principal and Interest are both exchanged in Full in a Currency swap.
