SEOUL, Feb 8 (Reuters) - South Korea's and Australia's central banks said on Wednesday they will extend an existing currency swap agreement while roughly doubling it in size in a move aimed at strengthening trade and financial stability.
The agreement between the Bank of Korea and the Reserve Bank of Australia will allow either country up to swap up to 9 trillion won ($7.84 billion) for 10 billion Australian dollars ($7.62 billion), double the amount of an earlier swap agreement signed in February 2014.
"This agreement is designed to promote bilateral trade for the economic development of the two countries, to enhance financial stability and for other, mutually agreed, purposes," a joint statement from both central banks said.
"The agreement will ensure that trade between the two countries can continue to be settled in local currency even in times of financial stress," it added.
The new agreement will be valid until Feb. 7, 2020 and both countries can discuss extending it again closer to the expiry date, the Bank of Korea said.
South Korea currently has currency swap agreements signed with China, Malaysia and Indonesia to buffer the economy from global financial upheavals.
($1 = 1,147.6000 won) ($1 = 1.3125 Australian dollars)