China's plan to extend yuan-denominated loans to other members in the BRICS group is a "further step" that will help internationalize the Chinese currency and boost trade among these emerging economies, experts say.

The China Development Bank will sign an agreement on yuan loans with their counterparts in the bloc that also groups Brazil, Russia, India and South Africa during the summit in India.

"China is asked to extend loans to a number of countries, including heavily indebted eurozone countries. If China were to do so, extending these loans in yuan is an excellent way to expand the use of the currency in international transactions, and would be a further useful step in the gradual internationalization of the yuan," said Vikram Nehru, a senior associate for Southeast Asian Studies at the Carnegie Endowment for International Peace, a think tank in Washington DC.

"This move makes perfect sense for China - the yuan can't become a reserve currency if countries aren't using it. Yuan-denominated loans - and swaps as in the recent case of Australia - are essential to make this happen," said Martin Edwards, an associate professor of international relations at Seton Hall University in New Jersey.

Last week, China signed a $30 billion currency swap deal with Australia to support bilateral trade and investment and enhance the internationalization of the yuan.

Experts say moves like this will inevitably increase the importance of the yuan in the global economy, but it will still take time to challenge the status of dollar.

"This will clearly reduce the influence exerted by the US dollar in the BRICS, while promoting the use of the national currencies, primarily the yuan. This is an important step to increase the importance of the yuan, although it will still take a long time for the Chinese currency to seriously challenge the dollar," said Oliver Stuenkel, professor of international relations at the Getulio Vargas Foundation in Sao Paulo, Brazil.

Christine Lagarde, managing director for the International Monetary Fund, said at the recent China Development Forum in Beijing that the yuan could become a reserve currency in the future if Beijing undertakes further economic reforms.

Lagarde said China needed "a roadmap with a stronger and more flexible exchange rate, more effective liquidity and monetary management".

The emerging economies of Brazil, Russia, India and China together account for about 40 percent of the world's population and make up more than 25 percent of global GDP, according to the IMF.

The IMF predicts that these fast-growing, large economies will emerge as the biggest economic bloc by the middle of this century.

"Steady globalization has expanded opportunities for many emerging markets to grow rapidly through trade, technology absorption and foreign direct investment. The world is moving toward multiple growth poles in which developing countries will contribute an increasing and significant share of global GDP and global trade," Nehru said.

"In practical terms, the BRICS will seek to strengthen economic ties, facilitate intra-BRICS trade, create a common stock market, align investment rules, perhaps sign further visa-waver agreements, strengthen cooperation on research and development and boost ties between their respective civil societies. In addition, they'll discuss ways to help Europe recover economically as soon as possible," Stuenkel said.