China has confirmed reports that it is working on an agreement with the 10-member Association of Southeast Asian Nations, ASEAN, to settle trade in yuan.

The state-run news agency Xinhua quoted a central bank official Saturday as saying the process is under way.

Jin Qi, assistant to the governor of the People's Bank of China, spoke on the sidelines of a China-ASEAN meeting in the city of Nanning, the capital of China's Guangxi Zhuang region.

News reports Thursday said an agreement between China and ASEAN is likely to be signed late this year or early next year.

Under the deal, banks in China and ASEAN countries would start exchanging yuan for ASEAN currencies.

Xinhua quoted chief economist of the Bank of Communications Lian Ping as saying that the agreement would greatly boost China-ASEAN trade and ensure financial stability in the region.

Lian noted that the U.S. dollar has been the dominant currency in payment and settlement in the Asia-Pacific region.

As the nation with the world's second-largest economy, China has been eager to give its currency a bigger international role.