Middle East Eye, 1/30/23

Iran and Russia have linked their banking systems, a senior Iranian official said on Monday, a move that will allow the two heavily sanctioned countries with deepening economic ties to trade and conduct business outside the US financial system.

The two connected their interbank communication and transfer systems. Since the 2018 reimposition of sanctions, Iran has been disconnected from the western-based Swift financial messaging system, while many Russian banks were kicked off the platform following Moscow’s invasion of Ukraine.

“Iranian banks no longer need to use SWIFT … with Russian banks, which can be for the opening of Letters of Credit and transfers or warranties,” deputy governor of Iran’s Central Bank, Mohsen Karimi, told the semi-official Fars news agency.

Swift is a Belgium-based financial messaging platform that allows trillions of dollars’ worth of money to cross borders daily and be transferred into bank accounts. It’s also used for foreign exchange settlement and trade. US banks often act as intermediaries in the transactions.

The decision to create an alternative payment system is the latest sign that Iran and Russia are moving beyond a marriage of convenience in hotspots like Syria, to a more comprehensive partnership against the West…

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