BRICS members Russia and Iran have officially abandoned the SWIFT payment system for cross-border transactions. The two countries will initiate payments to settle international trade using direct bank transfers. SWIFT payment system is no longer needed for trade between Russia and Iran, as both countries have agreed to carry out transactions directly through the banks. The two BRICS members will engage in direct bank transfers in their respective local currency and not the US dollar.
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The direct bank transfers with no SWIFT are between Russia and Iran only, and not the other BRICS members. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
BRICS: After Being Banned From SWIFT, Russia & Iran Initiate Direct Bank Transfers in Local Currency
Both Russia and Iran were banned from SWIFT in 2022 after the US pressed sanctions against the two countries. However, both countries were allowed to partake in SWIFT for a few transactions but have now decided to abandon it. The Central Banks of both the BRICS countries, Iran and Russia, are now working towards smoothing the direct bank transfers.
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The two BRICS members are now bypassing the US sanctions by completely sidelining SWIFT and engaging in direct bank transfers. Mohsen Karimi, Deputy Head for Central Bank of Iran and International Affairs confirmed that the country no longer requires SWIFT.
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“We have connected the transmission systems of messages of the two countries to each other. This means that the banks of the two countries no longer need Switzerland to communicate with each other and commercial banks of both countries can establish intermediary relations with each other. The exporter can issue an invoice in Rials to the Russian side and receive money from Russian banks in Iran,” said Karimi to Fars news agency.