In this report, analysts Lisa Landin, Samuel Lerjestad and Angelo Sun investigate whether there are ways for companies to optimise their foreign-currency management using FX swaps. Using FX swap pricing data, interest rates for each currency and synthetic account balances, they simulate the benefits of FX swaps in different scenarios and determine optimal transaction decisions.
On average, the swap strategy reduced costs by 83.5% compared to holding negative currency balances without executing swaps. The findings suggest significant upside for firms that actively manage currency exposures rather than relying on static approaches.