BEIJING — China's central bank on Jan 27 said that it has extended a bilateral currency swap agreement with its counterpart in Indonesia.

The deal has a scale of 250 billion yuan (about $40 billion), or 550 trillion Indonesian rupiah. It will be valid for three years and can be further extended with mutual consent, according to a statement from the People's Bank of China (PBOC).

The PBOC said the extension would help deepen the monetary and financial cooperation between the two countries, facilitate bilateral trade and investment, and safeguard financial stability.

A currency swap deal allows two institutions to exchange payments in one currency for equivalent amounts in the other to facilitate bilateral trade settlements and provide liquidity support for financial markets.