The agreement will last for three years and is extendable by mutual consent, Xinhua reported quoting a statement of the PBOC.

The swap is aimed at promoting bilateral trade, investment and financial cooperation, it said.

Since the onset of the world financial crisis in late 2008, China has also signed currency swap agreements with the Republic of Korea (ROK), Malaysia, Belarus, Indonesia, Argentina, Iceland and Singapore.

The central bank also signed a similar agreement with Hong Kong's monetary authority.

Analysts said the move would encourage traders to invest in the local currency as part of China's efforts to promote cross-border trade settlements in yuan, China's national currency.