The stronger the demand for dollar funding, the more negative the cross-currency basis becomes. When the extra cost of borrowing dollars is stated as a positive number, it is called the dollar funding premium.
Cross-currency basis
- Japanese
- 通貨ベーシス
- Last reviewed
- September 25, 2026
This is a draft, shown for review before publication.
The cross-currency basis is the deviation from covered interest parity when dollars are borrowed against yen or another currency through an FX swap or a cross-currency swap, expressed as a signed value from the side of the yen or other currency. It is zero when covered interest parity holds and negative when borrowing dollars is expensive.