Severing the country from the global payment system is likely to expand trade in national currencies
Disconnecting Russian banks from the SWIFT payment system will boost trade between Russia and Turkey in the two countries’ national currencies, according to the Turkish Exporters’ Assembly.
“Despite sanctions and restrictions [against Russia], Turkish lira exports increased by almost 100% in February this year,” the National Union of Turkish Exporters said on Friday, as cited by the TASS news agency.
The organization said the SWIFT ban would have no impact on the supply of Turkish agricultural products to Russia, although payment delays were possible.
Russia and Turkey signed an agreement on settlements and payments in national currencies in October 2019. Turkey is expected to expand its infrastructureto accept electronic transfers via Mir, the Russian alternative to SWIFT, and to connect its banks and businesses to the analog financial messaging system of the Central Bank of Russia, to provide an alternative to Visa and MasterCard, which are currently restricted from use in Russia.
In February, Russia was challenged with a wave of consolidated sanctions from the US and its Western allies. Among other penalties imposed on the country over its military operation in Ukraine, its financial system, energy exports, and forex reserves have been targeted. Seven Russian banks have been severed from SWIFT, effectively denying them access to international markets.
