Swap Rate

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DEFINITION of 'Swap Rate'

The rate of the fixed portion of a swap as determined by its particular market. This is the rate at which the swap will occur for one of the parties entering into the agreement.

INVESTOPEDIA EXPLAINS 'Swap Rate'

These rates are quoted by the market and will be almost identical to the rate used for the swaps, minus any premiums added.

For example: 1) The interest rate associated with the fixed portion of an interest rate swap.

2) The exchange rate associated with the fixed portion of a currency swap.

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RELATED FAQS
  1. How do companies benefit from interest rate and currency swaps?

    An interest rate swap involves the exchange of cash flows between two parties based on interest payments for a particular ... Read Full Answer >>
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