BEIJING, Jan. 8 (Xinhua) -- The central banks of China and Thailand have renewed a bilateral currency swap agreement, the People's Bank of China (PBOC) said Friday.

The swap line has a size of 70 billion yuan (about 10.8 billion U.S. dollars), or 370 billion Thai baht. It will be valid for a five-year period and can be extended on mutual consent.

The currency swap extension between the two central banks will help promote bilateral financial cooperation, expand the use of local currencies, and facilitate trade and investment, the PBOC said in an online statement.

A currency swap sees two parties agree to exchange a certain amount of foreign currency at a pre-determined rate, protecting against fluctuations.