How to manage interest rate risk. How to reduce interest rate hedging cost. 

Interest rate swaps are used for hedging and managing interest rate risk. The swaps can be either floating to fixed, fixed to floating or a basis swap. 

Most commonly used swaps in the global markets is a USDIRS which is a swap against Libor. The IRS or interest rate market is fairly liquid.

While the IRS levels are displayed in screen for standard tenor, often the loan will have an amortisation profile or interest rate dates which will not match with standard curve

Hence the fine swap pricing involves adjustment through
  • Zero rates
  • Appropriate interpolation
  • Adjustment of Libor basis
  • Ensuring fairness in dealing by avoiding mark up
  • Appropriate credit charge adjustment. 
Sometimes a fixed to floating swap is used to take advantage of the softening interest rate environment or to ensure asset liability duration mismatch.
 
We help companies in calculating exact interbank swap rates for interest rate hedging by taking care of all the finer adjustments and also help them with other supports like
  • Scenario analysis
  • Evaluation of caps, floors, collars and FRAs
  • Timing of the IRS
  • Execution of the IRS
  • Outlook on Libor and how that compares with FRAs
  • ISDA documentation etc. 

To learn more call us or email us. We are trusted advisors to many large and small corporates in India

Call us on: +91 7980397803 (8AM-10PM, Mon-Sat)

Email us on: vinay@quantartmarket.com