Society for Worldwide Interbank Financial System (SWIFT) has claimed share of the US dollar in global financial settlements dropped in February.
According to foreign media, the use of the greenback fell 1.07pc, down to 38.85pc of all global transactions conducted via SWIFT. However, on a yearly basis, the dollar’s share was still up by 0.42pc. The share of settlements in euro, on the other hand, rose in February by 1.23pc, to 37.79pc. The euro has increased the most among the top 5 global currencies year on year.
The Chinese yuan lost its position to the Japanese yen last month, dropping 0.97pc and taking 2.23pc in global calculations. However, the share of the yen in global settlements also decreased, and now stands at 2.71pc.
Meanwhile, Iranian Ambassador to Russian Federation Kazem Jalali has recently expressed that the two countries of Iran and Russia have started working together to connect their interbank systems to circumvent Swift’s financial transaction network. Both countries face severe Western sanctions, making it virtually difficult or impossible to settle their trade accounts through Swift, Jalali emphasized. “We are working in this direction and we have taken many steps in this regard,” he continued.
Last month, seven Russian banks parted from SWIFT, making it virtually impossible for them to access international markets, he said, adding that this prohibition is a part of the latest Western sanctions targeting Russia over its military operation against Ukraine.
Russia has its own payment mechanism called Financial Transfer System (SPFS), which has a similar function to Swift and allows the transfer of messages in the form of SWIFT. This financial transaction network was created as a replacement for Swift and has been developed by the Bank of Russia since 2014.
Jalali added that the SPFS has a similar function to Swift and allows transfer of messages in the form of SWIFT, Jalali added. Although Russian financial messenger is still weak, about 40 to 50 countries work with it and are members of this system.