The new cross-border payment-versus-payment (PvP) link between Hong Kong’s US Dollar real time gross settlement (RTGS) system and Indonesia’s Rupiah RTGS system has been launched on 25 January 2010, according to the Hong Kong Monetary Authority (HKMA).

The link, which starts operation today, will eliminate settlement risk in foreign exchange transactions between the US Dollars and Indonesian Rupiah by ensuring the simultaneous delivery of US Dollars in Hong Kong and Rupiah in Indonesia. Banks in Indonesia can better manage their counterparty risks arising from the foreign exchange transactions and enhance their operational efficiency in settling those transactions during Asian hours.

On 24 October 2008, the HKMA and Bank Indonesia signed a Memorandum of Understanding on the establishment of the PvP link. Following the completion of system development and testing, the link went live on schedule.

The link is operated in Indonesia by Bank Indonesia and in Hong Kong by Hong Kong Interbank Clearing Limited, which operates the interbank clearing systems in Hong Kong, and is jointly and equally owned by the HKMA and the Hong Kong Association of Banks.