BEIJING, March 11 -- China saw plunging new loans in February, largely due to the Lunar New Year holiday and a record credit surge in January.

New yuan-denominated lending in February dropped to 726.6 billion yuan (111.96 billion U.S. dollars), 297 billion yuan less than a year earlier, the People's Bank of China said in a statement on its website on Friday.

It went far below market expectations as new yuan-denominated lending in January exploded 71 percent year on year to 2.51 trillion yuan.

New February social finance, a measurement of funds that non-financial firms and households get from the financial system, was 780.2 billion yuan, 580.7 billion yuan less than a year earlier, and a sharp drop of 2.65 trillion yuan from January.

"The Lunar New year holiday and payback for January's record credit surge meant a downside surprise was always a possibility," said Tom Orlik, chief Asia economist at Bloomberg.

"Looking at the data for the first two months of the year together, credit growth remains on a rapid upward trend, and the government is targeting a faster credit expansion for 2016 as a whole. Industrial output data for January and February, slated for release Saturday, will be critical in determining the immediate policy outlook," he said.

The drop in total social finance is "eye-catching, but it would be wrong to conclude that lending is falling off a cliff. The one-week holiday for Lunar New Year in February meant some loans were dragged forward into January," and January's record total also prompted the central bank to "crack down on excess lending at some banks. That always made a slump in February a possibility," he noted.

Despite the drops, yuan-denominated lending stood at 97.19 trillion yuan at the end of February, up 14.7 percent year on year.

M2, a broad measure of money supply that covers cash in circulation and all deposits, rose 13.3 percent year on year to 142.46 trillion yuan at the end of February.

M1, a narrow measure of money supply that covers cash in circulation plus demand deposits, rose 17.4 percent year on year to 39.25 trillion yuan, the statement said.

M0, the amount of money in circulation, stood at 6.94 trillion yuan, a year-on-year drop of 4.8 percent. The central bank drained 310.5 billion yuan of cash from the market in February.

At the end of February, yuan-denominated deposits stood at 138.6 trillion yuan, up 13.3 percent. In February alone, yuan-denominated deposits gained 846.7 billion yuan.

By the end of February, total outstanding loans stood at 102.53 trillion yuan, up 13.6 percent from the previous year. Outstanding deposits in both yuan and non-yuan currencies rose 13 percent year on year to 142.89 trillion yuan at the end of last month.