09/20/2022, 11.29
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Colombo ready to join Russian payment system

by Arundathie Abeysinghe

Discussions are underway between central banks to allow Russian credit cards to operate in Sri Lanka. Last year almost 17,000 Russian tourists visited the island. The country is in economic recovery and also hopes to obtain a loan to buy fuel.



Colombo (AsiaNews) - Sri Lankan authorities are considering joining the Russian Mir payment system: discussions are currently underway between the country's central bank and that of Moscow. Launched in 2017, Mir is a payment and money transfer channel operated by the Russian National Payment Card System. 

According to senior government officials surveyed by AsiaNews, Mir is an easy payment system but 'it is necessary to obtain the Central Bank's approval' for the talks to continue.

On 6 March, Visa and Mastercard suspended operations in Russia following the invasion of Ukraine. Since then, holders of Visa and Mastercard bank cards issued in Russia cannot pay for goods and services outside their country. The US and its allies have sanctioned Moscow with exclusion from Swift, the main international payments system, which is controlled by Washington.

The use of Mir, however, would allow Russian tourists to use their credit cards while in Sri Lanka, something that - government officials say - the local authorities "would be happy to allow".

Data from the Sri Lanka Tourism Authority show that in 2021, despite the covid-19 pandemic, Russia was among the top countries in terms of the number of tourists visiting the island with almost 17,000 entries.

Since the protests that have affected the country in recent months "are now over and the island is a safe tourist destination", visitors will mainly return in November and December, AsiaNews sources say. 

According to sources in the Ministry of Transport, "there is hope that flights between Sri Lanka and Russia will start by mid-October".

Meanwhile, the authorities in Colombo are also continuing discussions with Moscow on the possibility of obtaining a loan for the purchase of Russian oil to 'alleviate the fuel crisis in Sri Lanka' that has gripped the country for months. The Wickmeresinghe administration expects 'great support' from Russia for economic recovery: according to sources in the Ministry of Transport and Highways, discussions on obtaining a loan are going 'very well'. 

According to local officials, already 'former President Gotabaya Rajapaksa had asked Russian President Vladimir Putin to provide Sri Lanka with a loan to buy oil from Russia'.

About 50 per cent of Russian exports to Sri Lanka are machinery and equipment, while about one third are grain, mainly wheat. Until 2018, Sri Lanka was one of the world's largest buyers of Russian chrysotile asbestos, which is used in the construction industry, but the government has decided to stop using asbestos by 2029, so the volume of purchases has decreased significantly. Sri Lanka exports tea to Russia, which accounts for 50% of its exports, and textiles, which account for 40% of exports.

Bilateral relations between Moscow and Colombo also include agreements on science, technology and innovation, tourism, culture, space exploration and fisheries.

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