A senior Iranian official said that Iran and Russia have linked their banking systems, allowing the two heavily sanctioned countries with growing economic ties to trade and conduct business outside of the US financial system.
Both countries connected their interbank communication and transfer systems. Iran has been disconnected from the western-based Swift financial messaging system since the reimposition of sanctions in 2018, while many Russian banks have been kicked off the platform following Moscow’s invasion of Ukraine.
Read more: What if Russia is isolated from the “Swift” system?
By establishing their own financial messaging system, Iranian and Russian banks will be able to conduct fast financial transactions without relying on SWIFT.
The primary financial messaging system used globally is SWIFT, which is based in Belgium. Although banks can carry out transfers without using SWIFT, doing so often requires using slower systems and manual processes, according to Investopedia.
According to Vladislav Gridchin, a Russian official, the bilateral messaging will not be affected by Western sanctions, according reported the official Islamic Republic News Agency.
Such an accord had been under discussion between the two nations for a year. Iranian Shahr Bank and Russian VTB Bank will participate in a trial initiative, according to the Iranian business website Tehran Bazaar.
The latest financial announcement comes as Donya-e Eqtesad, an Iranian newspaper, reported on Saturday, quoting a senior Iranian trade official, that Russia has surpassed China as the Islamic Republic’s biggest investor.
Iran and Russia have tried similar measures in the past to circumvent Western sanctions on them. Last year, both nations began trading in their own currencies in an effort to lessen reliance on the US currency. Because the dollar is used in the majority of international trade, US sanctions have heft.
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