A foreign currency swap, commonly known as an FX swap, is an agreement between two foreign parties to exchange currencies. The agreement entails exchanging principal and interest payments on a loan in one currency for principal and interest payments on a loan in another currency of equal value.

When a trade is held open overnight, a swap rate is credited or debited as a rollover interest rate. When a position is rolled over, the swap rate is credited or debited once for each day of the week.