JP Morgan Treasury Services, a division of JP Morgan, has developed a solution to facilitate a new currency clearing service for its Indonesian bank clients using Hong Kong's cross-border payment-versus-payment (PvP) settlement system.
By having access to this system, JP Morgan’s clients will be able to better mitigate foreign exchange settlement risk and increase operational efficiency.
The PvP infrastructure established by Bank Indonesia and the Hong Kong Monetary Authority links the real time gross settlement (RTGS) systems in both economies to provide simultaneous delivery of Indonesian Rupiah and US Dollar currencies within the Asia business day. The new infrastructure represents a new clearing standard between these two currencies.
By leveraging JP Morgan’s global payment network and its position in US Dollar clearing services, financial institutions also can benefit from optimised liquidity, faster payments and high standards of service delivery.
Raof Latiff, managing director and Asia head of treasury services clearing and foreign exchange at JP Morgan, said: “Beyond the role banks normally play in payment clearing and foreign exchange settlement, we are committed to fostering innovation in the industry and are proud to be part of this initiative led by Bank Indonesia and supported by the Hong Kong Monetary Authority. Our client banks in Indonesia value our successful experience with PvP settlement in Malaysia, where we continue to see a high demand for these services and future developments in this area.”
Simon Jones, managing director and regional treasury services executive in Asia Pacific at JP Morgan, said: “We are pleased to be able to offer a wider range of cash management services to our clients in Malaysia and Indonesia to meet their most advanced clearing needs.”