# Swap policy (forward rate policy)

- Canonical URL: https://www.gerhardmerk.de/swap-policy-forward-rate-policy-2
- Post ID: 591705
- Modified: 2023-07-25T21:12:29+00:00
- Language: en

## Definition

The central bank - sells USD to domestic banks by spot and - buys them back by forward at a contractually agreed rate. - At the ECB, foreign exchange swap operations are used to provide liquidity by taking USD against EUR for a limited period of time or to absorb liquidity by taking EUR against USD. These operations are a special instrument of money supply management. For banks, such transactions with the central bank are without risk. - See foreign exchange forward, foreign exchange swap, reverse repurchase agreement, swap carousel, swap rate. 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/

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