BEIJING - China and Laos have signed an agreement on bilateral monetary cooperation to enhance the use of local currencies in trade and investment, the People's Bank of China (PBOC), the country's central bank, announced Thursday.

The agreement, signed between the PBOC and the Bank of Lao PDR, will allow direct settlement of the two countries' own currencies in transactions under all open current and capital accounts, the PBOC said in a statement.

The agreement will strengthen monetary and financial cooperation between the two countries, boost the use of local currencies and facilitate trade and investment, the central bank said.