* March new yuan lending at 1.06 trln yuan vs 850 bln yuan
* March outstanding yuan loans +14.9 pct y/y vs +14.7 pct
* 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 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
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
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)