China and Nigeria have renewed their bilateral currency swap agreement, China’s central bank announced on Friday.

The agreement, valued at 15 billion yuan (approximately 2.09 billion U.S. dollars or 3.28 trillion Nigerian naira), will remain in effect for three years, with provisions for renewal upon mutual consent, according to the People’s Bank of China.

The renewal aims to bolster financial cooperation between the two nations, enhance the use of their respective currencies in trade transactions, and facilitate smoother bilateral trade and investment.

“This currency swap arrangement demonstrates the growing economic ties between China and Nigeria,” the central bank’s statement read.

The agreement, first initiated in 2018, allows businesses in both countries to settle trade and investment deals using their domestic currencies, reducing reliance on third-party currencies like the U.S. dollar. This move is expected to promote trade efficiency and reduce transaction costs for businesses.

China remains a key trade partner for Nigeria, with the agreement further cementing economic cooperation between the two nations in line with their shared goal of expanding economic and financial collaboration.