S. Korea, Malaysia sign $4.7 bn currency swap deal

South Korea and Malaysia on Sunday signed a currency swap agreement worth $4.7 billion, Seoul's central bank said, in a move to encourage bilateral trade and help curb currency swings.

The latest agreement allows the two Asian nations to purchase and repurchase each other's currency of up to 5 trillion won ($4.7 billion), or 15 billion ringgit, the central Bank of Korea said in a statement.

The deal -- valid for three years and renewable upon agreement -- will allow greater flexibility for businesses to use local currencies for trades that have been commonly settled in US dollars, the two countries' central banks said in a joint statement.

The latest agreement is the third currency swap deal South Korea has signed this month in a move to guard against financial turmoil and encourage trade with other emerging markets.

Asia's fourth-largest economy earlier this month struck currency swap deals worth $10 billion and $5.4 billion with Indonesia and the United Arab Emirates, respectively.