Chinese banks made more new yuan loans in March than expected, which analysts said was a sign of further monetary easing to shore up economic growth.

New loans reached 1.01 trillion yuan ($160.1 billion), exceeding market expectations of 800 billion yuan, the People's Bank of China said on Thursday.

Commercial banks' first-quarter lending increased by 2.46 trillion yuan.

M2, a broad measure of money supply that covers cash in circulation and deposits, rose 13.4 percent year-on-year in March, compared with 13 percent in February.

Lu Zhengwei, chief economist at the Industrial Bank Co Ltd, said an increase of more than 2 trillion yuan in deposits contributed to the lending surge in March. The gain allowed banks to lend more while staying below the maximum loan-deposit ratio of 75 percent.

"The figures also show that regulators and lenders are acting to avert a corporate cash crunch as the economy cools."

Lu said about two-thirds of the new loans were short-term financing, indicating that banks might have rushed to fulfill first-quarter credit quotas.

"We cannot expect new loans in the second quarter to stay at the same high level. But the amount will be enough to cushion the economic slowdown."

"The figures showed that monetary loosening is gaining strength, and previous concerns over insufficient credit demand could ease," said Qu Hongbin, HSBC's Hong Kong-based chief economist for China.

However, in view of ongoing weakness in exports and manufacturing, further loosening is needed, Qu said.