Foreign Exchange Swap Law and Legal Definition

The term "foreign exchange swap" means a transaction that solely involves:

a. an exchange of two different currencies on a specific date at a fixed rate that is agreed upon on the inception of the contract covering the exchange; and

b. a reverse exchange of the two currencies at a later date and at a fixed rate that is agreed upon on the inception of the contract covering the exchange. [7 USCS § 1a].