Swap rate is the fixed rate that makes the market value of a given swap at initiation zero. They are the borrowing rates between financial institution

Financial institution

In financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries...

s, usually with credit rating

Credit rating

A credit rating evaluates the credit worthiness of an issuer of specific types of debt, specifically, debt issued by a business enterprise such as a corporation or a government. It is an evaluation made by a credit rating agency of the debt issuers likelihood of default. Credit ratings are...

s of A/AA equivalent. Swap rates are calculated using the fixed rate leg of interest rate swap

Interest rate swap

An interest rate swap is a popular and highly liquid financial derivative instrument in which two parties agree to exchange interest rate cash flows, based on a specified notional amount from a fixed rate to a floating rate or from one floating rate to another...

s. Swap rates form the basis of the swap curve (also known as the par curve or LIBOR curve). A given swap rate is essentially equal to the risk free rate plus the interest rate risk of the swap.

In most emerging markets with underdeveloped government bond markets, the swap curve is more complete than the treasury yield curve

Yield curve

In finance, the yield curve is the relation between the interest rate and the time to maturity, known as the "term", of the debt for a given borrower in a given currency. For example, the U.S. dollar interest rates paid on U.S...

, and is thus used as the benchmark curve.