How can Russia's exclusion from SWIFT affect Azerbaijan's economy?

Western countries threaten Russia with exclusion from SWIFT – the international system of transferring banking information and making payments.

JAMnews tried to find out how this will affect the economy and people of Azerbaijan.

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“Urgently transfer rouble deposits to other currencies”

According to Gubad Ibadoglu, an economist and chairman of the Azerbaijani opposition Democracy and Prosperity Party, owners of deposits in roubles should be among the first to worry:

“I strongly advise Azerbaijanis with deposits in Russian roubles to urgently transfer their deposits to other currencies, or simply cash them out”.

“There won’t be any major problems”

Lawyer, banking expert Ekrem Hasanov believes that the problems that economic ties between Russia and Azerbaijan will face can be resolved in a couple of weeks:

“Russia has an alternative system of bank payments. Yes, in the first couple of weeks there may be some problems associated with the transition to a new system.

As for Azerbaijan and other post-Soviet republics, they can also implement the Russian transfer system. It is already working in some countries”.

“Role of black market may strengthen”

“It’s no secret that many families in Azerbaijan receive monthly living expenses from their members working in Russia. In turn, those working in Russia earn salaries in roubles. It is not difficult to guess that the well-being of these families will suffer greatly from a sharp depreciation of the Russian currency.

The other problem is money transfers to Azerbaijan, as it may no longer be possible via banking systems. It is not yet known how instant money transfer systems will react to the sanctions. If they are blocked, then there will be no civilized ways for the transfer.

I want to draw attention to the fact that in Azerbaijan even Russian banks, for example, VTB-Azerbaijan, still do not offer their customers debit cards in the Russian Mir system, an analogue of Visa and Mastercard systems. If the Azerbaijanis could get such cards, then there would be no problems with the transfer of money from Russia.

In this situation, the black market for money transfer, which was active quite recently, may once again come to the fore. To briefly talk about this system, in Russia a foreigner finds the “right person” involved in this illegal system, asks him to transfer a specific amount to his family, for example, in Azerbaijan, and pays interest. But in this case, the rouble exchange rate can be even more frightening than one in banks.

As for the economic ties between countries, they will certainly not suffer, because. the other day, the presidents of Azerbaijan and Russia signed an allied memorandum, one of the clauses of which implies trade in the national currencies of these countries.

Another thing is the reaction of ordinary people of Azerbaijan to what is happening. On social media, you can already find calls to boycott Russian-made goods. This may also affect the trade turnover between Russia and Azerbaijan, but only in the food sector”, said Hussein Ismayilbayli, editor of the Azerbaijani edition of JAMnews.