Five Turkish banks have started using Russia's Mir payment system, raising concerns that it could be used to circumvent sanctions. Since Mastercard and Visa have suspended operations in Russia, Mir card payments will allow Russian tourists to pay for their purchases in Turkey, writes BI.
There is very serious progress"towards a system that will allow Russians in Turkey to pay for their purchases, Turkish President Recep Tayyip Erdogan said after meeting with Russian President Vladimir Putin in Sochi. Turkey has also agreed to pay for Russian natural gas in rubles, Erdogan said.
The Turkish leader's meeting with Putin on Friday came three weeks after their meeting in Iran. Deepening relations between the two countries are worrying Western officials, some of whom are considering punitive measures against Turkey, such as asking companies to cut funding for Turkish firms, the Financial Times reported. There has been no official talk of such actions yet, the publication added.
Turkey's economy grew by 11% in 2021 compared to last year, but is suffering from skyrocketing inflation, which reached nearly 80% in July. The Turkish lira has also lost half of its value against the US dollar this year. The country's central bank has used its foreign currency to support the currency, but reserves increased by $3 billion last week after Russia's state-owned nuclear company Rosatom transferred some of the money to a Turkish subsidiary for a construction project, Bloomberg reported.
In June, U.S. Deputy Treasury Secretary Wally Adeyemo met with Turkish officials and bankers, warning them not to be used as a conduit for Russian money.
Turkey is a top destination for Russian tourists, with 7 million visitors in 2019, according to the Nikkei.