Tuesday, November 11, 2014

Russia to Startup Alternative to SWIFT by May 2015

This is something Russia had said they would do, but it was assumed it might take awhile to get this up and running. Per this article in Russia Today, they have set a goal to be ready by May 2015. A few quotes and then a comment. Read the whole article for context.


"Russia intends to have its own international inter-bank system up and running by May 2015. The Central of Russia says it needs to speed up preparations for its version of SWIFT in case of possible ”challenges” from the West."
"Given the challenges, Bank of Russia is creating its own system for transmitting financial messaging... It’s time to hurry up, so in the next few months we will have certain work done. The entire project for transmitting financial messages will be completed in May 2015," said Ramilya Kanafina, deputy head of the national payment system department at the Central Bank of Russia (CBR)."
"Calls not to use the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system in Russian banks began to grow as relations between Russia and the West deteriorated over sanctions. So far, SWIFT says despite pressure from some Western countries to join the anti-Russian sanctions, it has no intention of doing so."
My added comment: 
This serves as a reminder that the situation in the Ukraine is far from over. Russia is clearly preparing to be able to continue to operate regardless of what the west might do. In just the last few weeks we have had articles stating that Russia was behind cyber attacks against US banks and the White House. There are reports that Russia may have sent troops and vehicles into parts of the Ukraine. Russia continues to solidify relations with China in all realms. Meanwhile there are some who believe that the US wants oil prices down to put more pressure on Russia. With President Obama being a lame duck President, Russia may not feel the need to worry about keeping up a relationship with him. IMF reforms appear off the table for awhile as well.
So there is plenty to continue to monitor in regards to the ongoing decline in relations between Russia and the West, the US in particular. There are ongoing chess moves all over the board.

Added note: Here are a couple of more articles on this in the Russian press.

Moscow Times


Update 11-13-14: Russia buying large amount of gold to add to reserves


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