* March new yuan lending at 1.06 trln yuan vs 850 bln yuan expected
* March outstanding yuan loans +14.9 pct y/y vs +14.7 pct expected
* March M2 money supply +15.7 pct y/y vs +14.6 pct expected
* March Total Social Financing at 2.54 tln yuan vs 1.07 tln yuan in February
BEIJING, April 11 (Reuters) - Chinese banks made 1.06 trillion yuan ($171.2 billion) of new local currency loans in March, central bank data showed on Thursday, well above market expectations and adding to evidence of an economic recovery being fuelled by ample credit.
The data showed the country's lenders comfortably on target to extend 9 trillion yuan of new credit and signals Beijing's determination to keep credit flowing to underpin growth while inflation remains benign.
"This is really big and shows that there is ample funding in the Chinese economy to support growth and is positive for sentiment," Dariusz Kowalczyk, senior economist for ex-Japan Asia at Credit Agricole CIB in Hong Kong, told Reuters.
Total Social Financing, the central bank's broad measure of liquidity in the economy, surged to 2.54 trillion yuan in March, more than double the 1.07 trillion yuan in February.
"The outlook for further economic expansion is better with strong social financing," Kowalczyk added.
China's economy suffered its slowest year of growth for 13 years in 2012, expanding by 7.8 percent, though a fourth quarter bounce to 7.9 percent year-on-year was taken as the starting point of what is widely described as a modest recovery.
Analysts polled by Reuters expect economic growth in the first three months of 2013 to have been 8.0 percent versus the same period a year ago, a mild acceleration from Q4 2012's 7.9 percent growth.
Broad M2 money supply rose 15.7 percent last month from a year earlier, the People's Bank of China (PBOC) said in a statement on its website, www.pbc.gov.cn, well ahead of market expectations of 14.6 percent.
The PBOC has set a 13 percent target for 2013 money supply growth and Thursday's data signals a still expansionary underlying setting in monetary policy, despite recent commentary and liquidity management action that suggest to traders the central bank has switched its policy stance to neutral from easy.
China has given no public forecast for new lending this year, but analysts and state media broadly expect a figure of between 8.5-9.0 trillion yuan - expansionary versus the 8.2 trillion of new lending in 2012 - to help deliver an official GDP growth target of 7.5 percent in 2013.
Outstanding yuan loans grew by 14.9 percent from a year earlier, just ahead of market forecasts of 14.7 percent.
China's big four banks - the Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Bank of China - are the centrepiece of China's monetary system and lend at Beijing's behest.
Other financing channels, however, are gaining in significance as China gradually liberalises controls and undertakes market-oriented reform.
China's foreign exchange reserves, the world's largest, rose to $3.44 trillion at the end of March from $3.31 trillion at the end of December.
(Reporting By China Economics Team; Writing by Nick Edwards; Editing by Eric Meijer)