The $56bn swap between the countries’ central banks was due to expire last week, but was renewed last week to ease diplomatic tensions with Beijing over security issues, according to South Korea.

The renewal was announced by the Bank of Korea governor and the finance minister in Washington last week, where they attended a meeting of G20 finance ministers and central bankers.

The deal extension will reportedly help stabilise financial markets and boost trade.

Currency swap deals allow countries to lend money to one another in their own currency.