Russian c-bank governor comments on Russian alternative to SWIFT

Bank of Russia Governor Elvira Nabiullina today made a statement following the central bank’s decision to raise the key interest rates.

Nabiullina said that the Bank of Russia has been developing the domestic financial infrastructure. It will continue to operate smoothly. Namely, Russia has the financial messaging system (FMS) that can replace SWIFT inside Russia and allows the connection of foreign participants.

The National Payment Card System processes the entire traffic on payment cards inside Russia. International payment systems cards issued by the sanctioned banks will continue to operate inside Russia as normal.

The financial messaging system of the Bank of Russia (FMS), also known as SPFS, forms an alternative electronic financial messaging channel which is often called a ‘SWIFT analogue’. The FMS guarantees the uninterrupted transmission of financial messages within the country.

Credit institutions and their corporate customers are connected to the FMS when they are technically ready and establish contractual arrangements with the Bank of Russia. The procedure is defined by a special Bank of Russia regulation.

The Bank of Russia publishes draft descriptions of message formats and schemes based on the latest version of the corresponding ISO 20022 messages for use in interactions between banks and their corporate customers within the Bank of Russia financial messaging system.

As regards the banking sector liquidity, Ms Nabiullina said the Bank of Russia is continuously providing cash and non-cash rubles to banks. Due to the high demand for cash, the banking sector is now experiencing a structural liquidity deficit. Banks have sufficient collateral to increase the amount of liquidity raised from the Bank of Russia.

Speaking of the foreign exchange market, the Bank of Russia carried out FX interventions totalling $1 billion on Thursday and in a smaller amount on Friday. Considering the restrictions on using the gold and foreign currency reserves in dollars and euros, the regulator has not carried out interventions today.

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