Russia, Azerbaijan To Integrate Banking Payment Systems
Moscow and Baku signed off “The Declaration on “Allied Interaction between Russia and Azerbaijan” yesterday (February 22) in Moscow.
The agreement brings in protocols to promote the mutual use of their national currencies, the Ruble and the Newe Manat in mutual settlements, the integration of payment systems, including the joint servicing of bank cards, as well as the development of direct correspondent relations between the banks of the two countries.
The move is an additional step in protecting their currencies from Western sanctions imposed should the United States cut either off from the global SWIFT banking network and will make it easier for both to conduct financial trade bypassing the US dollar and global payments systems. Bilateral trade is about US$3.5 billion.
Azerbaijan and Russia are member of the Commonwealth of Independent States which also includes Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. Collective trade grew by 28.3% in 2021. Exports increased by 28.6%, while imports rose by 28%. All CIS countries ended the first nine months of the year with an increase in their gross domestic product values. The total GDP of the CIS expanded by 4.4% in 2021, according to the CIS Executive Committee, currently chaired by Kazakhstan. Russia’s total multilateral trade with other CIS nations reached US$95 billion in 2021. All can be expected to follow Azerbaijan’s lead and engage in mutual banking system protocols to keep trade sanctions at bay and limit the damage caused by any US disconnection of the SWIFT network.
Russia and China have also been looking at developing mutual trade settlements between the Ruble and RMB and disregarding the US dollar, again as protection against sanctions threats.
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