Non-Deliverable Swap (NDS)

A non-deliverable interest-rate swap is an agreement between counterparties to exchange cash flows involving a non-deliverable currency, applying a fixed and floating interest rate to an agreed notional amount over an agreed term to maturity. There is no delivery of the non-convertible currency: settlement value is paid in a convertible currency (usually US dollars) at the spot fix for the non-convertible currency.