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Turkish Banks Accept Russian Payment System

Five Turkish banks have accepted Mir, the Russian payment system that will enable Russian tourists in Turkey to carry out transactions, said Turkish President Recep Tayyip Erdogan after talks with Russian President Vladimir Putin in Sochi, Bloomberg reports.

However, as noted by Business Insider, this move raises concerns that this system will be used to evade sanctions against Russia due to the war in Ukraine. With Mastercard and Visa having ceased operations in Russia, the introduction of Mir will allow Russian tourists to make purchases in Turkey.

– There are 'very serious shifts' regarding the adoption of a system that will allow Russians in Turkey to pay for their purchases – said the Turkish president, as reported by the Turkish agency Anadolu.

It is worth noting that despite condemning Russia’s invasion of Ukraine, Turkey has not imposed sanctions on Russia and has continued to import energy from the country.

Erdogan also stated that Turkey has agreed to pay for part of its Russian natural gas in rubles and that payments in this currency will be a source of financial support for both countries. He also mentioned that during his meeting with Putin in Sochi, the governors of the central banks of both countries met simultaneously.

The Financial Times reported that the increasing cooperation between Turkey and Russia is concerning Western officials, with some considering the introduction of punitive measures against Turkey, although there have been no official discussions on this matter so far. However, U.S. Deputy Secretary of the Treasury Wally Adeymo met with Turkish officials and bankers in June and warned them that they should not be a channel for Russian money.

Turkey’s economy grew by 11 percent in 2021 compared to 2020. Inflation in Turkey has reached nearly 80 percent, and the Turkish lira has lost half of its value against the U.S. dollar. The Central Bank of the Republic of Turkey is drawing on its foreign currency reserves to support the lira, but reserves received a boost of $3 billion last week after the Russian state nuclear company Rosatom transferred some funds to the Turkish branch for a construction project, Bloomberg reports.