PBoC Warns Fed: Hike and We Devalue

If the Fed hikes rates, more capital will drain from China, so the PBoC preemptively signaled following hawkish talk from Fed officials this week, doing the largest devaluation of the yuan since the start of the year.
With the dollar index is experiencing its longest ever upward trend, a number of Fed officials to begin marketing the Fed should raise interest rates in April idea (market everyone wrong understanding of Yellen's dovish stance) but China's central bank was on the Federal Reserve may raise interest rates in April warned.

China's central bank warned that if the Fed to raise interest rates in April, the Chinese central bank will raise interest rates the Fed's action to make the appropriate measures. In recent months, the RMB devaluation surprise to the market a huge shock. China's central bank in January 7th sharply down the RMB exchange rate, China to the United States in order to convey a clear message: China does not want the Fed to raise interest rates in order to bring a new round of China's capital flight situation.

Over the past four days in RMB devaluation of close to 1% per day, Thursday depreciation in the biggest decline in more than two months.
One of the reasons I predicted a deep depreciation of the yuan was the divergence of American and Chinese monetary policy. The two countries are on different trajectories. Plus, with the presidential election there's a new layer of complexity. There's already talk of the Fed not hiking to help Clinton and the PBoC has to calculate the political impact of devaluation as well.

I expect markets will not cooperate either. The monetary break up of the Fed and PBoC begins.

iFeng: 中国正赶在美联储4月加息前偷偷干一件大事

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