Sir in this paper there was a question ZPS co,which asked that which of the methods are possible ways for ZPS co to hedge its existing foreign currency risk.
In answer they mentioned currency swaps & currency futures.
My question is that how ZPS can use currency swaps to hedge risk, swaps involves exchange of debt.But here in question their isn’t any other party mentioned in the scenerio then with whom ZPS will exchange debt & thus use currency swaps to hedge risk?
There are financial institutions that specialise in finding partners for swaps, so they could always find a swap even though no others are mentioned in the particular scenario.