As Google says here:
However, some webmasters engage in link exchange schemes and build partner pages exclusively for the sake of cross-linking, disregarding the quality of the links, the sources, and the long-term impact it will have on their sites. This is in violation of Google's Webmaster Guidelines and can negatively impact your site's ranking in search results. Examples of link schemes can include:
- Links intended to manipulate PageRank
- Links to web spammers or bad neighborhoods on the web
- Excessive reciprocal links or excessive link exchanging ("Link to me and I'll link to you.")
- Buying or selling links that pass PageRank