# Parallel loan and back-to-back loan

- Canonical URL: https://www.gerhardmerk.de/parallel-loan-and-back-to-back-loan
- Post ID: 591066
- Modified: 2023-07-25T21:13:48+00:00
- Language: en

## Definition

Unless otherwise defined, a loan granted by two companies to each other in the currency of the other partner. Repayment is made in the currency borrowed - i.e. denominated in the loan - at a contractually agreed date (loan in which two companies in separate countries borrow each other's currency for a specific time period and repay the other's currency at an agreed upon maturity). The purpose of such contracts is to hedge against currency fluctuations. However, such reciprocal loans have become less common today and are generally only used within corporate groups of globally active companies because the market for currency swaps is now fairly well developed. - See Forward Exchange Transaction. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 1.1.1