Ukraine and China have signed a currency swap agreement worth $2.4 billion, according to the National Bank of Ukraine (NBU). Ukraine expects it will relieve pressure on its currency which has lost above 40 percent against the US dollar in a year.

The three year agreement was signed in Shanghai by the governor of the National Bank of Ukraine(NBU) Valeria Gontareva and the governor of the People’s Bank of China Zhou Xiaochuan, according to NBU’s press release published on Friday.

Ukraine will provide some 54 billion hryvnia and China 15 billion yuan within the swap line.

“This agreement is extremely important for our countries, being strategic partners, and will promote the economic development of both countries. The funds received under the agreement may be used to finance commercial operations and direct investments between the two countries,” Gontareva said.

The practical implementation of currency swap arrangements will cut the demand of importers for foreign currency, which will lower the pressure on the hryvnia exchange rate and help stabilize the situation in the domestic money market, she added.

The hryvnia has lost about 44 percent since last May standing at 20.9 against the US dollar on May 15.

The agreement will come into effect in June when the previous agreement, concluded in 2012 expires. It will enable companies from both countries to use national currencies for export-import operations and to conduct settlements in national currencies without involving the currencies of other countries.

Ukraine’s economy is currently facing tough times; the country’s foreign debt totaled $72.9 billion at the beginning of 2015. Ukraine’s National Bank reserves have fallen dangerously below $5.5 billion in March, and the national currency, the hryvnia, has lost more than half its value in 2015.

Ukraine and China agreed on economic and technical cooperation worth $8 million in January. Ukraine’s exports to China reached $2.7 billion last year while import amounted to $5.4 billion.