SINGAPORE- The Monetary Authority of Singapore (MAS) signed a bilateral swap agreement with the Bank of Japan on May 21 to renew the currency swap facility between the two regulators.

Swap agreements are framework for foreign exchange transaction between both two parties.

The new swap agreement will enable the authorities in Singapore and Japan to swap Japanese yen and Singapore dollars against US dollars.

The size of the facility remains the same as the previous agreement, with Singapore allowed to swap Singapore dollars against US dollars up to US$3 billion, while Japan can swap Japanese yen against US dollars up to US$1 billion.

The new swap agreement will further strengthen bilateral financial cooperation between Singapore and Japan, MAS said in an announcement on Thursday. It will improve the stability of financial markets while supporting the growth of economic links between both countries.