Bank Negara Malaysia admits it is intervening in the currency market although it denies it will be imposing capital controls, according to news reports.

Bloomberg reported that Bank Negara Malaysia assistant governor Adnan Zaylani Mohamad Zahid had said “yes” today when asked if the central bank was intervening in the foreign-exchange market.

But Adnan said there would “definitely” be no capital controls, as such measures were unwarranted and would be far too damaging and risky for the economy, The Edge Markets reported.

He said the central bank was only clamping down on speculative activities on the ringgit.

“There is no restriction for fund managers, asset managers, corporates, residents, all of them are operating under existing foreign exchange administration (FEA) rules. Nothing has changed,” he was quoted as telling reporters at a briefing in Kuala Lumpur.

“In fact, for all the other banks, they're free to come and go. It is only [for] transactions that are supported or related to non-deliverable forwards (NDFs).”

He said they were attempting a targeted measure to contain the offshore NDF market.

He added Bank Negara's reserves remain at a comfortable level, although lower than pre-"taper tantrum" levels.

"Fund managers, corporates who are concerned about liquidity in the offshore market — they're more than welcome to come into the onshore market and transact with our licensed banks, which would include some of the foreign banks that they are used to," Adnan was quoted as saying.