The central banks of China and Canada have agreed to a currency swap worth 200 billion yuan ($32.67 billion) or C$30 billion, Reuters reported, citing a Canadian government statement issued at an APEC meeting  in Beijing on Saturday.

The swap will be effective for three years, according to a separate statement from China's central bank.

The agreement was announced after Canadian Prime Minister Stephen Harper met with Premier Li Keqiang.

China's central bank, the People's Bank of China, will also appoint a clearing bank in Canada for the yuan - or renminbi, as the currency is also called - as part of a memorandum of understanding, said the statement.

China's central bank said on Sunday that the Canadian branch of Industrial and Commercial Bank of China (ICBC) will be the clearing bank for a new offshore yuan hub in Toronto,  the first such hub in the Americas. ICBC is China's largest commercial bank by market value.

The currency swap will help set up the clearing bank, and allow the two banks to swap currencies if needed to ease trade and investment. The yuan clearing bank would be the first in the Americas, and allow Canadian financial institutions to use the clearing bank to process payments for their customers in yuan.

The move is in line with China's ambition to promote its currency to more international investors and eventually turn the "redback" [yuan] into a global reserve currency.

"This is a fantastic announcement for Canada and China relations, a terrific move for Canadian businesses to be able to compete more abroad, not only direct-to-China investment but as more RMB activity takes place around the world," said C.J. Gavsie, managing director of foreign exchange sales at BMO Capital Markets.

China will additionally give Canadian investors the right to invest up to 50 billion yuan initially in China's capital markets. The quota will be granted under the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme.

That program, launched in 2011, allows financial institutions to use offshore yuan to invest in the Chinese mainland's securities markets, including in stocks and bonds.