Interbank Money Market (Lending and Borrowing)
The interbank lending is a market in which banks lend funds to one another for a specified term. Most interbank loans are for maturities of short-term period. Such loans are made at the interbank rate.
Banks are required to hold an adequate amount of liquid assets, such as cash, to manage any potential bank runs by clients. If a bank cannot meet these liquidity requirements, it will need to borrow money in the interbank market to cover the shortfall. Some banks, on the other hand, have excess liquid assets above and beyond the liquidity requirements. These banks will lend money in the interbank market and earn interest on the assets.
The interbank rate is the rate of interest charged on short-term loans between banks. Banks borrow and lend money in the interbank lending market in order to manage liquidity and satisfy regulations such as reserve requirements.
The interest rate charged depends on the availability of money in the market, on prevailing rates and on the specific terms of the contract, such as term length.
Repurchase Agreement (Repo)
A repurchase agreement (repo) is a short-term secured loan: one party sells securities to another and agrees to repurchase those securities later at a higher price. The securities serve as collateral. The difference between the securities’ initial price and their repurchase price is the interest paid on the loan, known as the repo rate.
A cross-currency swap is an agreement between A bank and our Clients to exchange two different Currencies at an agreed-upon exchange rate, for a fixed amount of time with each currency earning a certain interest rate.
CCS allows clients to avoid FX Risk by not having to sell a currency on the spot market but simply swapping it for a different one for a certain period of time instead.
CCS is an instrument used by clients who have cash flows in one currency with which it normally conducts business but has excess funds in another currency.
Early termination of the agreement may incur additional costs.
- For Businesses, Organizations, and other Entities:
- Business/Organization/Entity name
- Full Legal Address
- Phone number and fax
- Constitutional rules and Organization registration certificate
- Company extract
- Source of funds of the organization
- Partnership Agreement
- Name and address (telephone number) of directors
- Evidence of identification of Directors, shareholders, joint venture
- Authorization documents of Signatories
All Parties interested in a Swap Arrangement/ Transaction must contact the A Bank Treasury Department at Abank_TreasuryDepartment@abank.com.mm
Note: The Limit, Tenor, and Interest Rates are to be negotiated on a case-by-case basis.