China and the Association of Southeast Asian Nations (ASEAN) should work together to step up bilateral yuan-denominated settlement, an official with China's central bank said Sunday.

An agreement on yuan-denominated trade settlement between China and ASEAN is currently underway, Jin Qi, assistant to the governor of the People's Bank of China, said this morning on the sidelines of the 3rd China-ASEAN Summit Forum on Financial Cooperation and Development.

Bank of China President Li Lihui

Bank of China President Li Lihui voiced his support for the proposal. China and ASEAN should promote cross-border yuan settlement, reducing exchange rate risk and boosting trade and investment, Li said.

Jin also called for active efforts to allow trading between the yuan and ASEAN countries' currencies on interbank foreign exchange markets.

The Chinese government launched pilot programs allowing limited cross-border trade settlement in yuan in July 2009. ASEAN was among the first overseas pilot regions. The trial has now been expanded nationwide with all foreign trade partners.

China's yuan settlement in cross-border trade surged to 957.57 billion yuan ($US 149.62 billion) in the first half of this year, 13.3 times more than that for the same period of last year, according to statistics from China’s central bank.