A cross-border delivery-versus-payment link between Hong Kong's US dollar real time gross settlement system and Malaysia's Ringgit real time gross settlement system has been launched.

The Monetary Authority said the link will help eliminate settlement risk of US dollar bonds issued and traded in Malaysia by ensuring simultaneous delivery of US dollars in Hong Kong and US dollar bonds in Malaysia.

As part of the initiatives to promote Malaysia as an Islamic financial centre and Hong Kong as an international financial centre, the delivery-versus-payment settlement services provide the necessary settlement infrastructure to support potential issuance of US dollar bonds in Malaysia.

The link is operated in Malaysia by Bank Negara Malaysia and in Hong Kong by Hong Kong Interbank Clearing.