The link will be operated in Indonesia by Bank Indonesia and in Hong Kong by Hong Kong Interbank Clearing, 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.
Eddie Yue, deputy chief executive of HKMA, said: “The PvP link between the US Dollar RTGS system in Hong Kong and the Rupiah RTGS system in Indonesia makes settlement safer and more efficient by eliminating the settlement risk arising from the delivery of two currencies in different time zones.”
Budi Rochadi, deputy governor of Bank Indonesia, said: “The implementation of the USD/IDR PvP link between the Indonesian Rupiah RTGS system and the US Dollar RTGS system in Hong Kong can help mitigate settlement risk in USD/IDR inter-bank FX trades in Indonesia.
“The implementation also gives benefits to Indonesian banks by allowing immediate utilization of IDR and USD since both currencies are settled real-time, simultaneously and in Asian time zone and potentially making wider choice of counterparties in inter-bank USD/IDR market as the market players are not constrained by counterparty trading limit representing FX settlement risk exposure. In turn, this could promote safe, sound and efficient FX market in the country.”
