Parallel loan

• A process whereby two companies in different countries borrow each other's currency for a specific period of time, and repay the other's currency at an agreed maturity for the purpose of reducing foreign exchange risk. Also referred to as back-to-back loans.

• An example of a parallel loan would be IBM agreeing to lend dollars to a sub of British Petroleum in exchange for the latter lending pounds to an IBM British sub. Such agreements are struck only when exchange controls in one or more countries prevent normal capital flows.


Follow this link for all the terms related to loan.

 Embedded terms in definition
Exchange controls
Exchange risk
Foreign exchange risk
Foreign exchange
 Related Terms

<< Par value stocks Parallel shift in the yield curve >>

Multi-Tasking In Your 30s, 40s or 50s: Managing for today and saving for tomorrow, including a child's college expenses and your retirement More...

There is no such thing as can't, only won't. If you're qualified, all it takes is a burning desire to accomplish, to make a change. Go forward, go backward. Whatever it takes! But you can't blame other people or society in general. It all comes from your mind. When we do the impossible we realize we are special people. Jan Ashford


Copyright 2009-2018 GVC. All rights reserved.