Tehran says Russia and Iran do not need the SWIFT international payment system
(Baonghean.vn) - The Deputy Governor of the Central Bank of Iran has stated that sanctioned countries are capable of conducting direct transactions.
RT reported on January 8 that recently, Deputy Governor of the Central Bank of Iran (CBI) Mohsen Karimi said that his country and Russia have officially switched from the Western financial payment system SWIFT to a direct interbank transfer mechanism.
Specifically, FARS news agency reported that Mr. Mohsen Karimi told Iran's state TV on January 7 (local time) that the above system allows businesses in both countries to transact in their respective domestic currencies, instead of using the US dollar or the euro. He explained: "We have linked the financial correspondence networks of the two countries. This means that our two countries' banks no longer need to go to Switzerland to communicate with each other and commercial banks of both countries can establish brokerage relationships with each other. Iranian exporters can now collect from the Russian side in rials and receive money from them through Russian banks in Iran." Mr. Karimi noted that the system also allows payments in Russian rubles.
SWIFT, headquartered in Belgium, is a highly secure bank transfer system that enables financial transactions globally. Although some countries have their own systems, most global transactions are still conducted through SWIFT. Last year, major Russian banks were cut off from the network as part of sanctions related to the Ukraine conflict.
Western restrictions have forced Russia to actively promote its domestic payment system SPFS, which was first announced when the US imposed sanctions on the country in 2014 as an alternative to SWIFT. The system facilitates financial transactions between domestic and international banks and as of the first half of last year had 514 participants, including 131 foreign institutions from 15 countries.
Iran and Russia, both targets of Western sanctions, first announced plans to phase out Western currencies from their shared settlements and use alternative financial systems in trade by 2022. During a meeting between their central bank heads late last month, Tehran and Moscow signed an agreement formalizing this aspiration.
