South Korea and Malaysia have signed a won-ringgit currency swap deal worth $4.7 billion as part of efforts to strengthen financial cooperation between the two nations, the Korean central bank said Sunday.

Under the three-year currency swap facility, the two countries can exchange 5 trillion won for 15 billion ringgit or vice versa, which could also be used to settle payments linked to their bilateral trade, the Bank of Korea said in a statement.

The BOK said that the deal can be extended upon agreement when it is up for renewal.

Bank of Korea Gov. Kim Choong-soo signed the deal while in Malaysia for an international forum.

Malaysia is South Korea‘s fourth-largest trade partner among the 10 ASEAN countries. South Korea imported goods worth $9.8 billion from Malaysia last year, which accounted for around 2 percent of the country’s total imports.

The won-ringgit currency swap deal came one week after South Korea and the United Arab Emirates clinched a similar swap deal worth $5.4 billion.

The move also came as Korea and Indonesia agreed to sign a won-rupiah currency swap deal worth $10 billion amid market turmoil facing emerging countries, such as India and Indonesia.

A currency swap line is a tool to defend against financial turmoil by allowing a country beset by a liquidity crunch to borrow money from others with its own currency.

The Korean government has been seeking to utilize currency swap deals with other countries to settle payments for trade in a bid to reduce its dependency on the U.S. dollar. (Yonhap News)