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ndividuals are now not allowed to purchase foreign currency above US$100,000 a month if the funds are deposited in banks, as Bank Indonesia (BI) seeks to curb speculation against the rupiah.

In a circular dated March 21, the central bank eliminated “savings” from a list of underlying transactions that are allowed to buy foreign exchange (forex) worth more than $100,000.

The list for individual customers also includes importers, forex debt payment and travel agents, among others. Meanwhile, for nonresidents, underlying transactions can include capital repatriation, debt repayment and different types of returns from their investments here.

The new rule revises a previous BI regulation issued in 2008, which required underlying transactions on individual forex purchases of above $100,000, both for residents and nonresidents.

“[The regulation] is aimed at supporting economic activities in the real sector in need of foreign currency, especially those pertaining to international trade,” BI said in the circular.

It will also reduce speculation on the local currency against the backdrop of tight dollar liquidity in the global market, said Destry Damayanti, chief economist of Bank Mandiri.

BI has intensified efforts in the past year to reduce speculation against the rupiah after the global economic downturn prompted investors worldwide to turn to safer instruments, such as the US dollar. The measures include imposing a 6-month minimum holding period on BI debt papers (SBIs) and intervention in the debt and currency markets.

 “BI’s latest move may mean that it wants to minimize dollar demand for nonbusiness purposes. BI is anticipating the thinning supply of dollars in the market,” Destry told The Jakarta Post on Friday.

 The rupiah has been under selling pressure since August, trading at Rp 9,173 per US dollar on Thursday versus Rp 8,481 against the US dollar on Aug. 1, according to BI data. BI has lost more than $12 billion from its foreign exchange reserve ever since, to defend the rupiah and intervene in the market.

Forex traders played down the impact of the new regulation on dollar-rupiah trading, saying that the rule targeted retail speculators whose movement would not be too heavy to impact the market.

 “Most of the daily transactions are already backed with underlying transactions,” an unidentified dealer with a foreign bank said, as quoted by Dow Jones Newswires.