Yellen’s shadow looms large over PBOC policy – Bloomberg

PBOC officials have often said that the monetary policy if mainly influenced by the domestic drivers. However, the recent decision suggests the Fed policy is having an influence on the PBOC as well.

The Fed hiked rates by 25 bps on March 15. This was immediately followed by the PBOC raising the borrowing costs the very next day in Asia. Experts say the move aimed at keeping a lid on the interest rate differential and Yuan weakness.