ANKARA – “We are looking for alternative methods,” so President Recep Tayyip Erdogan following the U.S. warning to Turkish banks …
on the Russian payment system (MIR). The U.S. Treasury had previously warned that Turkish banks working with the Russian payment system known as MIR will be subject to sanctions.
After the summit between Erdogan and his Russian counterpart Vladimir Putin in Sochi, five Turkish banks adopted the Russian MIR circuit, the payment circuit operated by the Russian central bank that has been in effect since 2017: it was developed by Moscow in response to international sanctions imposed against it in 2014 after the Ukrainian annexation of Crimea.
Erdogan’s government has presented the MIR as a beneficial system for both Turkey and Russia. The former needs to encourage the entry of foreign currency-perhaps in the form of Russian tourists-so as to give stability to the lira, which has been heavily devalued by the president’s decision. The latter, on the other hand, needs to mitigate the economic isolation brought on by the U.S. and Western allies after Moscow’s special military operation in Ukraine.