The People's Bank of China temporarily cut the reserve requirement ratio for the country's five biggest banks and said it will provide "temporary liquidity support" to several major commercial banks for 28 days as part of efforts to ensure ample liquidity ahead of the Lunar New Year holidays, Reuters reported Jan. 20, citing "three sources with direct knowledge of the matter" and a notice posted on the central bank's official microblog.

The central bank allowed Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Bank of China Ltd., Bank of Communications Co. Ltd. and Agricultural Bank of China Ltd. to lower the reserve requirement ratio by 100 basis points to 16%. The ratio will be restored to the normal level at an appropriate time after the holiday, the sources noted. The decision came after the PBOC injected hundreds of billions of Chinese yuan into the country's banking system.

The central bank added that the funding costs for the "liquidity support" will be about the same as the open market operations rate over the same period.

The banks did not immediately comment on the matter, Reuters reported.