The central banks of Indonesia and South Korea on Monday renewed their currency swap agreement in an effort to ease reliance on foreign exchange amid global uncertainty.

The deal is expected to help strengthen the bilateral cooperation on trade and finance, the Indonesian central bank said in a statement.

Under the deal, the two central banks can exchange local currencies of up to 10.7 trillion won (some 9.2 billion U.S. dollars) or 115 trillion rupiah (equal to 6.6 billion U.S. dollars).

The central bank said the facility is effective for three years and can be extended.

"The extension of the currency swap agreement is one of steps to boost economic cooperation between Indonesia and South Korea through the usage of local currencies so that it can reduce the reliance on a certain currency," Indonesian Central Bank Governor Agus Martowardojo said.

"The extension of the agreement is vital to supporting economic security especially in facing the recent global uncertainty," he added.

Countries in the region, which have witnessed risks of U.S. Fed. Reserve's hawkish policy, would be facing challenges this year as the U.S. monetary policy plans to carry out three rate hikes.

source: Xinhua