BEIJING (Xinhua) -- The People's Bank of China (PBOC), the country's central bank, announced Friday that the nation's new yuan-denominated lending reached 586.8 billion yuan (92.7 billion U.S. dollars) in October, up 17.5 billion yuan year-on-year.

New loans last month also represented a sharp increase from 470 billion yuan in September, the PBOC said in a statement on its website.

The figure beat previous market estimates of around 500 billion yuan. Xi Junyang, a professor with the Shanghai University of Finance and Economics, said that the sharply increasing new loans were within his expectations as they reflected an optimistic economic outlook for the near future.

By the end of October, the outstanding broad money supply (M2), which covers cash in circulation and all deposits, rose 12.9 percent year-on-year to 81.68 trillion yuan.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, increased 8.4 percent year-on-year to 27.66 trillion yuan by the end of last month, the statement said.

According to the PBOC statement, outstanding yuan-denominated deposits totaled 79.21 trillion yuan as of the end of last month, up 13.6 percent year-on-year. The growth rate was 0.6 percentage point higher in September.

Meanwhile, outstanding foreign currencies-denominated deposits stood at 262.6 billion U.S. dollars, up 9.4 percent year-on-year. New deposits of foreign currencies rose 7 billion U.S. dollars year-on-year.

E Yongjian, a financial researcher from the Bank of Communications, said the sharp rise of new lending meant that the credit demand from the economy was high. It was also a result of the fine-tuning of the nation's macro-economic policies.

Chinese Premier Wen Jiabao said last month that the country would properly fine-tune economic policies while maintaining control of the intensity, pace and focus of economic regulations.

China has made inflation control its top priority this year and adopted monetary-tightening measures to curb excessively rising prices. So far, the central bank has raised interest rates three times and hiked reserve requirement ratio (RRR) by six times.

The National Bureau of Statistics announced earlier this week that the consumer price index (CPI), the main gauge of inflation, rose 5.5 percent last month, down from 6.1 percent in September.

The easing pressure of price gains and rising new lending sparked speculation that there would be some loosening of economic policies by the government for the rest of the year.

Analysts, however, say the government is most likely to maintain the fine-tuning stance and that the possibility of loosening the monetary policies is low.

Xi said the October CPI still stayed at a high level compared to the government's annual target of 4 percent. Xi added the fundamental loosening of monetary polices would only occur if the CPI showed an obvious trend of declines.

E Yongjian expected the central bank to rely more on open-market operations to flexibly regulate liquidity. He also said the central bank may as well consider a cut in banks' RRR in the fourth quarter.

Currently, the nation's banks are required to set aside a record high of 21.5 percent of their cash in reserves.