China's new yuan loans have reached 7.1 trillion yuan ($988 billion) in the first quarter of this year, up by 1.29 trillion yuan year-on-year, the central bank reported on Friday.

The growth rate of broad money supply, or M2, rose to 10.1 percent by the end of March, compared with 8.8 percent in February and 8.6 percent a year earlier, according to the People's Bank of China, the central bank.

The rise of the credit and money supply was mainly because of the countercyclical monetary policy actions to encourage commercial banks' lending and offset the economic slowdown risks, said Ruan Jianhong, head of the PBOC's statistics and analysis department.

The aggregate financing reached 262.24 trillion yuan at the end of March, increased by 11.5 percent year-on-year, and 158.82 trillion yuan was for the yuan-denominated loans, the official data showed.

"The current liquidity level in the financial sector is ample, and the increase of the credit and money supply was mainly for supporting the novel coronavirus epidemic control work and stabilizing economic growth," said Ruan.

Sun Guofeng, head of the PBOC's monetary policy department, said that the central bank has injected about 2 trillion yuan of liquidity in the first quarter.

"The monetary policy transmission system has been improved, as 1 yuan of liquidity injection has increased 3.5 yuan of loans", an efficient level compared with that in some major economies, said Sun.