Explain the meaning of derivatives. Describe the Currency Swaps in detail.

Derivatives are financial instruments whose value is derived from the value of an underlying asset, index, or rate. These assets can include stocks, bonds, commodities, interest rates, or currencies. The primary purpose of derivatives is to hedge against risks or to speculate on the future price movements of these underlying assets. Derivatives can be traded on exchanges or over-the-counter (OTC) between parties. They come in various forms, including forwards, futures, options, and swaps. The key characteristic of derivatives is that their value is linked to the price movements of the underlying asset rather than the asset itself being traded directly.

Currency swaps, a type of derivative, are financial agreements between two parties to exchange cash flows in different currencies. They are used primarily to manage ________ _____ ________ _________ _______ ________ ____ _________ ______ _____ ____ _______.
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