The Bank of Japan (BOJ) and the Monetary Authority of Singapore have extended a local currency swap agreement by three years to 2022, the Japanese central bank said on Friday. The agreement allows for the exchange of local currencies between the two central banks of up to 15 billion Singapore dollars ($11.0 billion) or 1.1 trillion yen ($10.13 billion), the BOJ said.

"By utilising the swap agreement, the Bank of Japan would be prepared to provide liquidity in Singapore dollars, should Japanese financial institutions face unexpected difficulties in Singapore dollar settlements," the BOJ said.

The swap agreement, which was originally signed for a three-year term in 2016, is now extended to Nov. 29, 2022, it added.