LONDON (Business Insider) - Five of Turkey’s banks have started using Russia’s Mir payments system, raising concerns that it could be used to skirt sanctions. As Mastercard and Visa have halted operations in Russia, Mir card payments will allow Russian tourists to pay for their purchases in Turkey.
There are “very serious developments” on the adoption of the system that will let Russians in Turkey pay for their purchases, said Turkish President Tayyip Erdogan after meeting Russian President Vladimir Putin in the resort city of Sochi, according to Turkey’s Anadolu Agency.
Turkey has also agreed to pay for some Russian natural gas in rubles, Erdogan said.
The Turkish leader’s meeting with Putin on Friday came three weeks after they met in Iran. The deepening of the relationship between the two countries is worrying Western officials, some of whom are thinking about punitive actions for Turkey, such as asking companies to reduce financing to Turkish firms, the Financial Times reported. There have been no official talks about such actions for Turkey so far, the media outlet added.
Turkey’s economy grew 11% in 2021 from a year ago, but is beset by soaring inflation that hit almost 80% in July. The Turkish Lira has also has lost half of its value against the US dollar this year. The country’s central bank has been drawing down on its foreign currency stash to support the lira — but the reserves got a $3 billion boost last week after Russia’s state-owned nuclear company Rosatom transferred some money to a Turkish subsidiary for a construction project, Bloomberg reported.