Parallel loan (Business)

what is a parallel loan

Parallel Loan

Definition: 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 loan s.


Parallel Loan

Parallel Loan Technique used to curtail foreign exchange fluctuation risks wherein two businesses based in different countries lend their domestic currency to each other. A time is decided for repayment at which the loans are paid back. Also called back-to-back loan s.

Parallel Loan - A loan arrangement in which a company borrows in its home currency and then trades this debt for the foreign currency debt of a foreign counterpart.

Parallel Loan

A type of foreign exchange loan agreement that was a precursor to currency swap s. A parallel loan involves two parent companies taking loans from their respective national financial institutions and then lending the resulting funds to the other company's subsidiary.

English: Parallel loan

Franзais: Prкt parallиle

Paridad cambiaria:

Tipo de

cambio oficial de una moneda por otra. Por ejemplo, la paridad del dуlar es el tipo de cambio de una moneda con respecto a los dуlares.

Fixed income instruments denominated in the respective currencies of the countries where they are placed.

An agreement defining each party's rights should one party default on its obligation. A setoff is common in


Receivables balance fractions

The percentage of a month's sales that remains uncollected (and part of accounts receivable) at the end of succeeding months.

Arrangement whereby two companies in two different countries borrow the same sum of money in each others currency for a set period. The aim of the transaction is to avoid currency risk. Also known as

s. The growth of currency swap s has reduced their popularity.

A setoff is common in

arrangements. Rings Trading arenas located on the floor of an exchange in which traders execute orders. Sometimes called a pit. "Ring the cash register" Used in the context of general equities. "Take a profit." See: Profit taking.


Category: Credit

Similar articles: