Central banks of Malaysia and the Republic of Korea (RoK) on October 20 signed a bilateral currency swap agreement in a bid to promote the use of local currencies for bilateral trade and strengthen financial cooperation between the two countries.

The arrangement allows for the exchange of local currencies between the two central banks of up to 5 trillion hwan or 15 billion ringgit (4.75 billion USD), according to news agencies.

The effective period of the arrangement is three years, and can be extended by mutual agreement, allowing firms from both countries to have greater flexibility to use local currency for settlement of their bilateral trade and investment activities.

Earlier this month, the RoK also signed such agreements valued at 10 billion USD and 5.4 billion USD with Indonesia and the United Arab Emirates, respectively.-VNA