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A term of international banking, is an arrangement under which two firms (i.e., companies) in different economies (i.e., countries) borrow each other’s currency and agree to repay (such loans) at a specified future date. Each company gets full amount of the loan on the repayment date in their domestic currency without any risk of losses due to exchange rate fluctuations. It has developed as a popular tool of minimising the exchange-rate exposure risk among the multi-national companies. This is also known as the parallel loan.