More countries and regions, especially China's trading partners in the Association of Southeast Asian Nations (ASEAN), will step up to sign currency swap agreements with China amid the global economic downturn, economic experts said.

The People's Bank of China (PBOC), China's central bank, had signed bilateral currency swap agreements with Malaysia, South Korea and China's Hong Kong Special Administrative Region in the past two months, totaling 460 billion yuan (US$67.3 billion).

The move aimed to promote trade and investment to boost economic development, said the central bank.

ASEAN countries which "suffered from the 1997-98 Asian financial crisis" are more likely to be the next ones to establish a currency swap with China, said Zhao Xijun, professor of finance at the Renmin University of China.

Chai Yu, director of Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, pointed out that a number of countries are willing to sign currency swap agreements with China," especially the eight neighboring countries that had signed currency settlement agreements with China", including Russia and Vietnam.

Why currency swaps?

Many Asian countries and regions had started to focus on regional cooperation to avoid a repeat of the financial crisis that rocked the region in 1997, especially in times of global financial downturn.

In 2000, ASEAN members, together with China, Japan and South Korea, launched the Chiang Mai Initiative, a network of bilateral currency swap agreements to enhance monetary cooperation.

"Bilateral currency swap agreements help to keep a stable financial and monetary system and avoid exchange rate risk," said Zhao Xijun.