FX Forwards, FX Swaps, NDFs, and Cross-Currency Swaps
All four are transactions linked to exchange rates. They differ in whether principal is exchanged, whether interest is paid during the term, and which currency is used to settle.
| Point of comparison | FX forward | FX swap | NDF | Cross-currency swap |
|---|---|---|---|---|
| Principal exchange | Principal in both currencies is exchanged on the delivery date | The same foreign currency amount is exchanged in opposite directions in two legs | No principal is exchanged | In the typical form, the same principal amounts are exchanged at the start and at maturity |
| Number of payments | Paid on the delivery date, with no cash moving before then (a period-delivery forward can be executed in several parts) | Twice, at the near leg and the far leg | A single difference payment on the settlement date | In the typical form, at the start, on each payment date during the term, and at maturity |
| Interest during the term | None | None | Only the difference is paid, on the settlement date | Interest in the two currencies is exchanged at regular intervals |
| Tenor | The delivery date is set as a fixed date or within a period | Mostly under one year | The valuation date and settlement date are set in the terms | Normally one year or longer |
| Settlement currency | Both currencies | Both currencies | One currency (often the US dollar) | Both currencies |
| Typical uses | Fixing the yen amount of an import payment or export receipt | Raising or investing foreign currency, and hedging the currency risk on foreign currency assets | Hedging currency risk in currencies whose delivery abroad is restricted | Banks raising foreign currency, and hedging the currency risk on foreign currency assets |
The table follows the explanations and sources in the linked articles.
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Last reviewed: 2026-10-19