China and Canada have renewed a bilateral local-currency swap agreement, a move aimed at strengthening financial cooperation and promoting the use of their own currencies in bilateral trade and investment, China’s central bank said on Friday.

With approval from China’s State Council, the People’s Bank of China (PBOC) and the Bank of Canada recently signed an agreement to extend the swap arrangement, the PBOC said in a statement. The size of the swap line is 200 billion yuan ($27.9 billion), and the agreement will remain in force for five years, with the option of extension by mutual consent.

The renewal of the currency swap agreement is expected to help expand the use of the yuan and the Canadian dollar in cross-border transactions, facilitate trade and investment between the two countries, and contribute to financial stability, the PBOC said.

Bilateral currency swap agreements allow central banks to provide liquidity in each other’s currencies, reducing reliance on third-country currencies in trade settlement and financial transactions. China has signed such agreements with more than 40 countries and regions as part of its broader push to internationalise the yuan.

China and Canada have maintained long-standing economic and financial ties, with cooperation spanning trade, investment, and financial services. The renewed swap agreement comes as China continues efforts to deepen financial openness and strengthen cooperation with major global economies amid a complex international environment.