The Arab Monetary Fund's regional cross-border payment system has begun full operations, settling transactions in multiple currencies.
Buna, as the AMF payments clearing and settlement system is known, executed the first live payment in UAE dirhams between Dubai's Mashreq Bank and Banque Misr in Egypt, the AMF said in a statement on Monday.
“The successful first live payment transaction is a strong testament of our commitment to deliver on time and demonstrate Buna’s ability to function within the set requirements … despite unprecedented difficult times and global challenging conditions,” Abdulrahman Al Hamidy, director general of the AMF, said.
The move paves the way for Buna to continue expanding its network of participants and currencies, he said.
“Our focus will always be to offer modern payment solutions across the Arab region and beyond, within the highest standards of information security and in compliance with international standards.”
In February, the AMF rolled out Buna, a multi-currency platform that enables financial institutions, including commercial lenders and central banks in the Arab world, to send and receive cross-border payments.
Last week, Saudi Arabia's riyal was included as the third Arab settlement currency in Buna after the UAE dirham and Egyptian pound.
The kingdom's largest lender, National Commercial Bank, was nominated as a settlement bank for the Saudi riyal, the AMF and Saudi Arabian Monetary Authority said in a December 24 statement.
The new Buna system will promote trade and investment between Arab countries. It will also help in the development of financial and banking services and products across the region, according to the AMF.
With the support of the central banks, Buna is in the process of expanding its network, with more than 120 banks currently in the process being onboarded.
The platform aims to promote regional financial integration, by encouraging the use of Arab currencies in cross-border settlement and clearance transactions and supporting investment ties with global trading partners of Arab countries.
Abu Dhabi-based AMF was founded in 1976 to help its member countries implement various economic and financial reforms and boost growth. Member countries include Jordan, the UAE, Bahrain, Saudi Arabia, Syria, Somalia, Iraq, Oman, Palestine, Kuwait, Lebanon, Libya and Egypt.