The People's Bank of China (PBOC), the country's central bank, has renewed a bilateral currency swap agreement with the Central Bank of Iceland.

The agreement is worth 3.5 billion yuan (about 493.18 million U.S. dollars), or 70 billion Icelandic krona, the PBOC said in a statement.

The agreement is valid for five years, according to the statement.

The arrangement will strengthen financial cooperation between China and Iceland, facilitate bilateral trade and investment, and safeguard financial market stability, the statement added.