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Banks find it necessary to accommodate their clients’ needs to buy or sell FX forward, in...

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Finance

Banks find it necessary to accommodate their clients’ needs tobuy or sell FX forward, in many instances for hedging purposes. Howdoes a bank mitigate the currency exposure it has created foritself by accommodating the clients’ forward transaction?

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The bank mitigate the currency exposure in a forward trade through swap transactions A swap transaction is the simultaneous sale or purchase of spot foreign exchange against a    See Answer
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Banks find it necessary to accommodate their clients’ needs tobuy or sell FX forward, in many instances for hedging purposes. Howdoes a bank mitigate the currency exposure it has created foritself by accommodating the clients’ forward transaction?

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