Capped IRS (interest rate swap) is a balance-neutral operation consisting of an interest rate agreement for future periods. The operation enables one to limit exposure to the risk of interest rate fluctuation for a period greater than 1 year . This is an agreement to swap interest payments in a single currency (swap of a fixed interest rate for a variable one). The „fixed“ rate typically paid by the Client depends on the conditions at the start of the term, but the maximum amount is guaranteed. The variable interest rate is typically derived from the same reference interest rate (6-month PRIBOR). As with an IRS, the buyer of a Capped IRS insures against the rise of interest rates, while the seller insures against their fall (in this case the rate of any client has a lower limit, i.e. the client has a guaranteed minimum – Floored IRS). A Capped IRS applies to a series of specific interest periods.