UPDATE 1-China c.bank vows to push forward yuan internationalisation

* China to promote global yuan usage, widen channels - c.bank

* Data shows yuan settlement in China's trade fell in 2016 yr/yr

* C.bank says yuan's function as reserve currency will increase (Adds details, comments from statement)

BEIJING, Oct 18 (Reuters) - China will push ahead with yuan internationalisation and boost the global usage of its currency, the central bank said, following a decline in yuan settlement in trade deals last year.

The People's Bank of China said it would keep the yuan's position stable in the global monetary system, according to its 2017 yuan internationalisation report posted on its website on Tuesday.

"Looking ahead, the scope of international usage of renminbi will be further expanded in 2017 and usage channels will be further widened," the central bank said in the report.

"Renminbi internationalisation will play a more active role in serving the real economy and facilitating trade and investment."

The yuan, also known as the renminbi, is only partially convertible and Chinese leaders have pledged to make it fully convertible, although they have never given a timetable.

The report, however, said the value of trade deals settled in the yuan, fell 35.5 percent in 2016 from the previous year.

Yuan settlement accounted for 16.9 percent of China's total goods trade last year, it said.

Earlier central bank data showed the proportion of yuan settlement in China's trade rose to 22.6 percent in 2015 from about 20 percent in 2014.

Yuan settlement was close to zero in 2009, when China started to internationalise the yuan.

China's ambition to transform the yuan into a major global currency led to its inclusion in the International Monetary Fund's Special Drawing Right (SDR) basket last October, in addition to the U.S. dollar, the euro, the yen and the pound.

But the pace of yuan internationalisation slowed last year due to yuan weakness and tighter controls on capital outflows.

The yuan fell 6.5 percent against the dollar in 2016 - the biggest annual drop since 1994.

Authorities have announced a string of measures since late last year to tighten controls on capital outflows, including closer scrutiny of outbound investment deals.

The yuan has gained about 5 percent this year due to dollar weakness and tighter controls on moving funds out of China.

The yuan's role as a reserve currency will develop, the central bank said, adding that more than 60 countries and regions have included the yuan in foreign exchange reserves. (Reporting by Beijing Monitoring Desk and Kevin Yao; Editing by Kim Coghill and Jacqueline Wong)