(22 April 2010 – Asia) JP Morgan Treasury Services has announced the development of 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.The new system allows JP Morgan’s clients to better mitigate foreign exchange (FX) 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.
This infrastructure represents a new clearing standard between these two currencies, the bank said.
Raof Latiff, managing director and Asia head of treasury services clearing and FX at JP Morgan said that beyond the role banks normally play in payment clearing and foreign exchange settlement, JPMorgan are committed to fostering innovation in the industry and are proud to be part of this innovation led by Bank Indonesia and supported by the Hong Kong Monetary Authority.
JP Morgan also provides clearing services using PvP settlement in Malaysia.
JPMorgan’s client banks in Indonesia value a successful experience with PvP settlement in Malaysia, where the firm continues to see a high demand for these services and future developments in this area, Mr Latiff added.