China’s new yuan-denominated lending amounted to 1.05 trillion yuan (170.5 billion U.S. dollars) in March, picking up from 644.5 billion yuan in February, central bank data showed on Tuesday.

Although March’s credit data came in better than expected, Lu Ting, China economist at Bank of America Merrill Lynch, cautioned against reading too much into the rebound as February’s data was heavily distorted by the Chinese New Year.

On a year-on-year basis, the volume was down 12.4 billion yuan, said the People’s Bank of China in an online statement.

In the first quarter, new yuan loans totalled 3.01 trillion yuan, an increase of 259.2 billion yuan from the same period last year.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 12.1 percent year on year to 116.07 trillion yuan at the end of March, the bank said.

The rate was slower than the 13-percent target set for 2014, a disparity which analysts attributed to slower deposit growth and reduced capital inflows.

As of the end of last month, yuan deposits stood at 109.1 trillion yuan, rising 11.4 percent year on year, but down 1.1 percentage points from the rate seen in February.

Meanwhile, weak capital inflows incurred by the yuan depreciation also contributed to the slower monetary supply, said Zhang Zhiwei, chief China economist with Japan’s Nomura Securities.

“The central bank intervention appears to have stymied one-way positioning in yuan and capital inflows may have fallen, thus possibly reducing the contribution from foreign exchange purchases to money supply,” Zhang said in a research note.

China’s total social financing aggregate, a broad measure of liquidity in the economy, stood at 5.6 trillion yuan in the first quarter.

The latest data came as growth in the world’s second-largest economy has slowed faster than expected and inflation remains largely subdued, fanning speculation that the government will ease monetary policies.

China’s consumer price index, a main gauge of inflation, increased 2.4 percent year on year in March, official data showed.

Growth data for the first quarter is due on Wednesday, and market consensus is that expansion will be shown to have slipped below the annual target of 7.5 percent during the period.

“We maintain our view that GDP slowed to 7.3 percent in the first quarter and will slow further to 7.1 percent in the second, partly due to weak momentum in the property sector,” Zhang said, adding that he expects China to cut the reserve requirement ratio in the second quarter to bolster growth.