Australia and South Korea have strengthened economic ties at the G20 meeting in Sydney.
The Reserve Bank of Australia and the Bank of Korea have signed a currency swap agreement, which will allow for the exchange of currencies between the two central banks of up to $A5 billion or 5 trillion won for three years.
The RBA said in a statement on Sunday the agreement was designed to promote bilateral trade for the economic development of both countries.
"In particular, the agreement will ensure that trade between the two countries can continue to be settled in local currency even in times of financial stress," the RBA said.
The deal was signed by RBA governor Glenn Stevens and Bank of Korea governor Choongsoo Kim on Sunday.
Earlier this month, the Australian government signed a free trade agreement with South Korea.
