time to read 3 minutes

First payment between UAE and Egypt as Buna goes liveMENA

First payment between UAE and Egypt as Buna goes live

The Arab Money Fund (AMF) has announced that the first payment in UAE Dirhams on its new cross-border payment and settlement system, Buna, has taken place between Mashreq Bank (in the UAE) and Banque Misr (in Egypt). The new system will allow banks to settle cross-border payment transactions in multiple currencies, speed up international payments in the Arab region, and strengthen anti-money laundering systems.

The Buna network is currently being expanded with more than 120 banks being onboarded. The platform is designed to “empower Arab economies and promote regional integration, by encouraging the usage of Arab currencies in cross-border settlement and clearance transactions and supporting investment ties with the global trading partners of Arab countries,” according to the AMF.

why it matters
Banks often have to pre-fund accounts in foreign banks in order to carry out cross-border payments, which adds to costs for foreign exchange and remittances. Foreign transactions may also be carried out in US dollars, creating extra costs and compliance issues. The new cross-border payments and settlement system for Arab countries should speed up international payments while reducing costs for business and private individuals.