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Russia and Iran agree to replace SWIFT

Mehdi Safari, Advisor for Economic Diplomacy at the Ministry of Foreign Affairs of the Islamic Republic of Iran, said that Moscow and Tehran are ready to test a new system of financial information exchange and cross-border money transfers, which should replace the SWIFT system. According to him, the parties have already reached an agreement in principle on this issue. In this regard, in Iran, as in a number of other countries, it will already be possible to use a credit card of the Mir payment system. As Safari said, the card will be active in Iran in the near future.

Mehdi Safari also spoke about the fact that Russia and Iran will work on a new money transfer system developed in Russia, which will become an alternative to the international SWIFT system, in an interview with Russian media. According to him, Moscow and Tehran have already agreed on all the main points and details.

Safari explained that special negotiations were held on the activation of the Russian payment system “Mir” in Iran. He said that after the head of the Central Bank of the Islamic Republic of Iran visited Russia, several more rounds of negotiations took place with the head of the Central Bank of Russia, as well as with several other banks also operating in Russia. According to Safari, the Russian Mir card will soon be possible to pay in Iran, but he does not know for sure whether it is already valid anywhere in the territory of the Islamic Republic.

Mehdi Safari also said that Russia and Iran had been in talks for a long time and were working together on an alternative money transfer system, even before large-scale sanctions were imposed on Russia. Various options have been worked out, and now an agreement has been reached on a combined option that takes into account the features of both sides.

When asked whether the two countries would use another money transfer system instead of SWIFT for mutual settlements, Safari replied that in such a situation, when both parties want to exclude the dollar from mutual settlements, naturally, they will work using their own special payment system.

Safari explained that each side, both Russia and Iran, made their proposal on this score. Then it was decided nevertheless to develop an option that would represent a combination of proposals from both parties, and it was on the basis of this combined option that an agreement was reached on conducting foreign exchange transactions.

However, in addition to using an alternative system of money transfers, the two countries also faced the issue of the possibility of using their national currencies in mutual settlements. On this account, Safari gave the following explanation: “The agreement on the use of national currencies in mutual trade has long been reached. In particular, Iran has already imported large volumes of Russian grain for the national currency.”

These agreements on trade in the national currency, as Safari explained, were reached following the results of trips to Russia by the head of the Central Bank of Iran. But in order to be able to constantly use national currencies, such operations must be carried out regularly, so that each of the parties accumulates certain reserves of both the Russian ruble and the Iranian rial. Now Iran has already imported a large volume of Russian grain for the national currency, and the import of Russian wheat this year is not comparable with the volumes of previous years. Russia, in turn, according to Safari, imported for its national (Iranian) currency consignments of dairy products, building materials and sanitary ware of Iranian production.

Iran, as you know, has been officially a member of the SCO regional organization since last year. And there has already been a proposal to form a single currency for all member countries of the organization, in connection with which Safari explained: “Iran, in particular, has already submitted its proposals in writing to create a single currency for all member countries of the organization.” If this proposal is approved, the use of a common currency will help resolve major trade issues between such large countries as China, Pakistan, Russia and India. In particular, it will be possible to quickly conduct all financial transactions between the SCO member states. Safari also added that in order to facilitate trade with all major countries wishing to conduct international financial transactions without the dollar, it is desirable for Iran to achieve not only membership in the SCO, but also membership in organizations such as the EAEU and BRICS. The economic adviser of the Iranian Foreign Ministry expressed hope that this issue would also be resolved in the near future through the efforts of Iranian diplomats and other officials.

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