Korea and China have agreed to use their currency swap arrangement to facilitate trade settlements in their own tender.

The Bank of Korea said Tuesday that the won-yuan swap line, worth W64 trillion (US$1=W1,083), will allow companies in both countries to settle trade deals in both currencies starting later this month.

The agreement comes as part of the Korean government's efforts to internationalize its currency after the 2008 global financial crisis.

It is expected to help companies cope more easily with currency risks and transaction costs, while decreasing their heavy reliance on the U.S. dollar.