Benefits

• A CCIRS transaction creates an opportunity for interoperability between different currencies, interest rates and interest bases.
• Cross-currency interest rate swaps can provide a predictable cash flow in interest, credit or liquidity management activities.
• The foreign exchange rate and interest rate risk can be managed in a coordinated manner.
• A CCIRS transaction may be closed in whole or in part by a reverse transaction at any time before its expiry if the financing of the enterprise changes.
• The risk of your loans/deposits/bonds with another bank may also be covered.
• In addition to the interest quoted and accepted by the bank, no other expenses are charged to the client.

Risks

• Depending on interest rate and exchange rate movements, you may be required to provide additional margin during the life of the transaction.
• The potential loss of a CCIRS transaction is theoretically unlimited.
• If you close the CCIRS deal by entering into a reverse transaction during the term, you may incur unlimited losses depending on the current market situation.
• The CCIRS transaction involves an obligation: you are obliged to settle accounts with the bank even at lower/higher levels than the fixed interest rates, i.e. you may even realize a significant currency loss.
• Replacing a fixed interest payment with variable interest payment may make you vulnerable to adverse interest rate changes.
• While conversely, if interest rates are fixed, you may not benefit from a positive shift in money market yields.
  
  

Experts

If you have any questions, feel free to contact us.

Useful documents

These documents in English language to the person concerned shall be for information purposes only. OTP Bank Plc shall fulfil its obligations imposed by the legal regulations or requirement of supervisory authority by the documents in Hungarian language.
In the event of any discrepancy between the English language and Hungarian language versions, the Hungarian language version shall prevail.

Information on the suspension of the market making obligation (available only in Hungarian)