(Bloomberg) — China’s onshore yuan advanced for the first time in nine sessions, after the central bank issued a verbal warning against currency speculation.

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The currency advanced 0.1%, halting an eight-session slide of around 3%. The gains came after the People’s Bank of China late on Wednesday issued a strongly-worded statement saying that speculators will definitely lose money in the long term and key market participants need to “protect the authority of the fixing.” It also set the fix at a stronger-than-expected level for the 26th straight session.

The daily reference rate, Beijing’s most widely used tool to guide yuan expectations, has done little to arrest the currency’s weakness amid a surging dollar. For most of the past week, the onshore yuan has been trading close to the weak end of its 2% trading band versus the greenback. That’s a sign that traders are sticking to their bearish bets on the yuan amid the dollar’s strength and as the local economy suffers from Covid lockdowns and turmoil in the property sector.

“The yuan fix turned out to be a bear trap and the PBOC’s stern warning was timed well,” said Fiona Lim, senior foreign exchange strategist at Malayan Banking Bhd. in Singapore. Still the dollar-offshore yuan pair is likely to remain buoyant at current levels with the greenback direction still a dominant driver of this pair, she said.

The onshore yuan has fallen about 4% against the greenback this month and is on track for the worst annual loss since 1994. On Wednesday, it fell to the weakest level since early 2008 and the offshore unit slid to a record low in data going back to 2010.

One of the banks that provides the official fixing quote traded the yuan at the fixing level when markets opened, for a second straight day, according to traders who asked not to be identified because they are not allowed to speak publicly. However, dollar buying demand has been heavy and state banks’ sale of dollars did not last, they added. The offshore yuan fell 0.5% 7.1963 per dollar at 11:33 a.m. local time.

Commentary from local newspaper Securities Times also sought to calm market angst stemming from yuan’s weakness. The speed at which the yuan has depreciated against the dollar has actually been moderate compared to other currencies, and investors should view the moves with rationality, it said.

The PBOC’s headache is shared by policy makers worldwide, as the dollar continues to surge. China’s central bank is also being forced to walk a tight rope between boosting its economy that’s facing a rising risk of a recession, without spurring yuan weakness. After a surprise cut to a key interest rate in August, the PBOC paused its easing this month. Some economists expect it to delay any major stimulus moves, like lowering interest rates and the reserve requirement ratio for banks to avoid adding further pressure on the currency.

China may be worried about a repeat of 2015, when monetary easing and growth concerns coincided with the Federal Reserve’s tightening cycle, leading to yuan depreciation as well as a one trillion-yuan ($139 billion) decline in foreign-exchange reserves through 2016.

Authorities have been cautious about boosting liquidity amid yuan weakness even as demand for cash surges toward quarter-end and Golden Week holidays. Overnight repo rates, a gauge of interbank liquidity, fell to the lowest level since early 2021 after the PBOC net injected 180 billion yuan via open market operations Thursday.

Onshore yuan trading will be closed next week for local holidays, leaving the offshore unit without an anchor ahead of a major party meeting next month. Earlier this week the PBOC imposed a risk reserve requirement of 20% on currency forward sales by banks to make it more expensive to short the yuan. That’s after a previous move to reduce the foreign-currency reserve requirements for banks.

(Updates throughout.)

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