Chinese policy banks are seeking to expand lending to commodities-rich countries in Latin America using the yuan instead of the dollar, as part of its efforts to internationalize its currency, the Wall Street Journal reported.

Since earlier last year, China's Exim Bank (Export-Import Bank) has been in negotiations with InterAmerican Development Bank to establish a renminbi (the yuan) fund to finance the infrastructure projects in Latin America and the Caribbean, the report said quoting a source.

The fund, which is worth as much as 1 billion U.S. dollars, could be launched this year, it said.

The Exim Bank also promised to provide as much as 200 million U.S. dollars for the bank to finance trade between China and the region, part of which will be provided in yuan, according to an agreement signed between the two lenders last September.

China Development Bank, meanwhile, has been also raising yuan funds in Hong Kong’s yuan debt market. Data from Dealogic shows that the pociy bank has sold about 2 billion U.S. dollars worth of yuan debt in Hong Kong.

The report noted that China is pushing to give the yuan a wider role in trade and investment, but said due to strict controls over the exchange rate and capital flows, there are few takers for China’s yuan-denominated loans overseas especially in developed countries such as the U.S and the Europe.