Turkish President Tayyip Erdogan will convene a top tier economy-focused meeting on Friday at which Russian payment system Mir and possible Western sanctions will be discussed, two sources with information on the matter told Reuters.
The meeting with government officials and others will also address agreements with Russia, recent heavy volatility on the Istanbul stock exchange and the general economic situation, the sources said, requesting anonymity.
Two private Turkish banks, Denizbank and Isbank, suspended use of Mir this week after Washington expanded its sanctions on Russia over its invasion of Ukraine, including targeting the head of the entity that runs the payments system. Read full storyRead full story
NATO member Ankara opposes Western sanctions on Russia on principal and has close ties with both Moscow and Kyiv, its Black Sea neighbours. It also condemned Russia’s invasion and sent armed drones to Ukraine as part of its diplomatic balance.
Yet Western nations are growing concerned over increased economic ties between Turkey and Russia, diplomats say, particularly after several meetings between Erdogan and President Vladimir Putin, including last week in Uzbekistan.
The United States and European Union “will be following compliance developments with Turkish banks, large groups that do business in Russia, and of course banks using Mir,” said Hakan Akbas, managing director of Strategic Advisory Services, an Istanbul-based political and sanctions compliance advisory.
“We could see secondary sanctions from the EU this time toward Turkish individuals and companies… and the U.S. will continue to distance itself from Ankara before the upcoming existential elections,” as was evident at the United Nations meetings this week in New York.
Earlier on Thursday, the head of Russia’s National Card Payments System said Mir bank cards continued to work in Turkey, despite the two banks suspending them. Read full story
Russia’s central bank vowed last week to push ahead with expanding the number of countries that accept its Mir cards.
The U.S. sanctions target people and entities accused of helping Moscow skirt financial sanctions. Last month the U.S. Treasury sent a letter to big Turkish businesses warning they risked penalties if they maintained commercial ties with sanctioned Russians.
Earlier this week, a senior U.S. administration official said Washington expects more banks will cut off Mir over sanctions risk and added that the suspension decisions by Isbank and Denizbank made a lot of sense. Read full story
Separately, on the Istanbul bourse, bank shares have tumbled sharply since last week after a strong rally since July, prompting the country’s clearinghouse to amend risk parameters to help ease pressure. Read full story