Iran and Russia have linked their interbank communications and money transfer systems to help boost trade and financial transactions, a senior Iranian official said today as both Tehran and Moscow have been hit by Western sanctions.

Since 2018, following the reimposition of U.S. sanctions on Iran after Washington withdrew from the 2015 Iran nuclear deal it signed with other world powers, the Islamic Republic has been disconnected from the international financial messaging system SWIFT, which is headquartered in in Belgium and which is an important access point for international banking transactions.

Similar restrictions were placed on some Russian banks following Moscow’s invasion of Ukraine last year.

“Iranian banks no longer need to use SWIFT… with Russian banks, which could be to open letters of credit and transfers or guaranteesThis was reported by Deputy Governor of the Central Bank of Iran Mosem Karimi to the semi-official news agency Fars.

While Russia’s central bank declined to comment on the agreement signed on Sunday, Karimi said that “about 700 Russian banks and 106 foreign banks from 13 countries of the world will be connected to this system“, without indicating the names of foreign banks.

Iranian Central Bank Governor Mohammad Farzin hailed the move. “Financial channel between Iran and the world is being restored“, he wrote on Twitter.