China's bank lending expanded in September, the central bank said late Monday, but analysts said policy easing might taper off as the government seeks to control inflation.

Domestic banks extended 787.0 billion yuan ($128.9 billion) in new loans last month, the People's Bank of China said in a statement, up from 711.3 billion yuan in August.

The September figure was well above market expectations of 674.5 billion yuan, according to a survey of 10 economists by Dow Jones Newswires.

Analysts said robust credit growth would pave the way for China to meet its 7.5 percent annual growth target but authorities could take measures to control bank lending to contain inflationary risk.

"Given the current growth momentum, the Chinese government could easily achieve its 7.5 percent growth target," Bank of America Merrill Lynch economist Lu Ting wrote in a research report.

"But inflation will be edging towards the cap at 3.5 percent," he added.

Chinese inflation hit a seven-month high of 3.1 percent in September, data showed Monday, with analysts warning further upward pressure on prices would restrict the government's options to boost the economy.

"We expect the government to prevent further easing of credit policy, and could even take some measures to prevent credit growth from growing too fast," Lu said.

Beijing has introduced some measures to stimulate growth since late June, including a "mini" stimulus for rail and urban investment, tax cuts and looser monetary policy.

Figures from the central bank also showed China's foreign exchange reserves -- already the world's largest -- rose to $3.66 trillion by end-September, the biggest quarterly increase since the second quarter of 2011.

The figure was up from $3.50 trillion at the end of June.

Analysts said foreign investment has continued to flow into China despite worries over other emerging market economies, causing foreign exchange reserves to rise.