China's top banking regulator says yuan bears will suffer 'heavy losses'

China's central bank will use foreign exchange intervention and monetary policy tools to stop the yuan weakening

China’s banking and insurance regulator said on Saturday it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer “heavy losses” if they bet against the currency.

The yuan has lost more than 2.5% against the dollar since the festering China-U.S. trade dispute intensified earlier this month. It is now less than a tenth of a yuan away from the 7-per-dollar level authorities have in the past indicated as a floor.

“Short-term fluctuation of the yuan exchange rate is normal, but in the long-run, China’s economic fundamentals determine that the yuan will not depreciate persistently,”