China's bank lending rose to $1.60 trillion in 2014, the central bank said Thursday, as the government sought to loosen credit to spur faltering growth in the world's second-largest economy.

Domestic banks made new loans of 9.78 trillion yuan ($1.60 trillion) last year, the People's Bank of China (PBoC) said in a statement.

The figure represented year-on-year growth of 10.0 percent from 8.89 trillion yuan in 2013, data showed, but fell short of a reported 10 trillion yuan annual target.

Chinese authorities encouraged banks to lend more in the last two months of 2014 in an attempt to reach the mark, media reports said, and in November the government also cut interest rates for the first time in over two years.

But banks only extended 697.3 billion yuan in new loans for December, the PBoC said, down from 852.7 billion yuan in November.

"The slowdown of the new loan extension in December suggests that China's commercial banks are still concerned about the credit risks," ANZ Banking Group said in a research report.

Total social financing, a broader measure of credit in the economy, was 16.46 trillion yuan for all of last year, down by 859.80 billion yuan from 2013, in a reflection of concerns about credit risk and tighter control over informal "shadow banking" activities, analysts said.

ANZ expects more monetary easing this year, including cuts in banks' reserve requirements, to combat slowing growth. Reserve requirements are funds that banks must put aside, as required by the central bank.

"As the economy continues to slow and the risk of deflation looms large, we expect monetary policy to ease further," ANZ said.

Separately the central bank said the China's foreign exchange reserves -- the world's largest -- reached $3.84 trillion at the end of the fourth quarter, down from $3.89 trillion at the end of the third quarter.

"The fall in FX reserves reflects currency fluctuations rather than sales by the People's Bank," Julian Evans-Pritchard, China economist at Capital Economics, said in a research note.