SRI LANKA – RUSSIA Colombo ready to join the Russian payment system

The central banks of the two countries are discussing the possibility of allowing Russian credit cards to operate in Sri Lanka. Last year, almost 17,000 Russian tourists visited the island. The economy is recovering and the country hopes to obtain a loan to purchase fuel.

Colombo () – The Sri Lankan authorities are studying the possibility of joining Russia’s Mir payment system: talks are currently taking place between the country’s central bank and Moscow’s. Launched in 2017, Mir is a money transfer and payment channel operated by the Russian National Payment Card System.

consulted senior government officials, who maintain that Mir is an easy payment system, but “it is necessary to obtain the approval of the Central Bank” in order to move forward with the talks.

On March 6, Visa and Mastercard suspended their 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 United States and its allies have sanctioned Moscow by excluding Swift, the main international payments system, controlled by Washington.

The use of Mir, however, would allow Russian tourists to use their credit cards during their stay in Sri Lanka, something that, according to government officials, the local authorities “would be happy to allow”.

Data from the Sri Lanka Tourism Authority shows 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 “have already ended and the island is a safe tourist destination,” visitors will return mainly in November and December, according to sources from .

The Ministry of Transport, for its part, “expects flights between Sri Lanka and Russia to begin in mid-October,” sources from the ministry report.

Meanwhile, the Colombo authorities are also continuing talks with Moscow on the possibility of obtaining a loan for the purchase of Russian oil. The goal is to “alleviate the fuel crisis in Sri Lanka” that has gripped the country for months. Wickremesinghe’s government expects “great support” from Russia for the economic recovery and according to sources from the Ministry of Transport and Highways, the talks to obtain a loan are going “very well”.

“Former President Gotabaya Rajapaksa had asked Russian President Vladimir Putin to give Sri Lanka a loan to buy oil from Russia,” local officials comment.

50% of Russian exports to Sri Lanka are machinery and equipment, while about a third are cereals, 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. The government has decided to stop using asbestos by 2029, so the volume of purchases has decreased considerably. 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 fishing.