Russia and Iran have been working together to connect their interbank messaging systems in order to bypass the SWIFT financial transactions network, according to Kazem Jalali, Iran’s Ambassador to Russia, on Thursday.
SWIFT is a messaging network used by financial institutions to securely transmit information and instructions using a standardised code system.
Both countries are subject to severe Western sanctions, making trade settlements via SWIFT difficult or impossible.
“We are making efforts in this direction,” Jalali told reporters, as quoted by RIA Novosti news agency, RT reported.
Seven Russian banks were cut off from SWIFT last month, effectively denying them access to international markets. The ban was part of the most recent round of Western sanctions aimed at Russia for its military operation in Ukraine.
Russia has its own payment mechanism, the Financial Message Transfer System (SPFS), which has similar functionality and allows messages in the SWIFT format to be transmitted. It was developed as a counterpart to SWIFT, which has been developed by the Bank of Russia since 2014.
The ruble soared on Wednesday after it was announced that payments for gas exports to certain Western countries would be converted to Russian rubles.
The Russian currency immediately rose to a three-week high of 95 rubles per US dollar before falling back below 100. It also gained 3.5% against the euro, trading at 110.5 rubles per euro.
