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from below link:

https://www.linkedin.com/pulse/distinction-between-fx-swaps-currency-risk-management-akubue-cfa/

"if the date of settlement of the export proceeds has been extended by three months, Sweet Tubers can employ a ‘matched’ FX swap to rollover the forward contract on the date of expiration. This will entail buying 1 million dollars at expiration at the previously agreed forward rate to close out the contract, and immediately entering into a fresh agreement to sell one million dollars forward to be delivered in 3 months’ time at a new forward rate(swap rate). This effectively maintains the hedged position"

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FX swaps struck at non-market related rates are generally frowned upon in the Global code as they can be used as ways of extending credit without proper authorization. For this reason extensions are typically done at the prevailing market rates and any cash flows resulting are settled on the maturities in question. However you can structure around this requirement, you are in affect doing a fx swap and a loan/depo with the client and can use that fact to correctly price the off market legs of the transaction.

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In the example it sounds like the bank is offering their client the “previously agreed forward rate” to use to roll the swap position. Otherwise the deal was to take delivery of USD and pay NGN at the already agreed rate no matter where spot is at expiration.

Otherwise yeah, if spot was lower than the swap roll rate offered by the bank, and you were buying the near leg, you would take spot and buy lower. With the far leg having the new forward rate.

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