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Tuesday, 13 September 2022

Egypt could soon start using RUB as central bank works on MIR link

MIR is coming: The Central Bank of Egypt is working to link Russia’s MIR payments system with Egypt’s homegrown Meeza card network, House Budget and Planning Committee Chairman Fakhri El Fiqi told Ala Mas’ouleety (watch, runtime: 4:57) last night.

SOUND SMART- Uh, wasn’t Mir a space station? Yup. It was a Soviet-era installation run from 1986-2001. But we’re not talking about that Mir. This MIR is Russia’s answer to Mastercard and Visa. It’s a payments system that operates independently of the Western financial system, allowing countries to transact with Russian banks outside of Swift — and letting Russian citizens to make digital transactions. It’s an incomplete analogy, but think of it as Egypt’s 123 network on steroids.

Could Egypt and Russia drop the USD for bilateral trade? El Fiqi said Egypt could move to pay for Russian commodities such as wheat and cooking oil in RUB rather than USD once Egypt’s banking system is hooked up to MIR. This, he said, would be a “positive step” for the country and would alleviate some of the funding pressure currently weighing on Egypt by a scarcity of USD.

It’d be good for tourism: MIR has become essential for Russians traveling overseas since US payments companies severed ties with Russian banks following Moscow’s invasion of Ukraine. Before the war Russia was one of Egypt’s biggest tourism markets by volume, but the number of visitors have fallen with the onset of the war and sanctions on the Russian economy. Integrating MIR in Egypt would mean that Russians would be able to pay in RUB, use their cards, and access ATMs, making it easier for them to visit the country.

There were rumors of this before: Reports in Russian media earlier this year said that Egyptian authorities were working to allow businesses in destinations popular with Russian tourists to accept MIR. This was confirmed by the head of the Red Sea Chamber of Hotel Establishments, Alaa Akel, who told us some months back that they were awaiting instructions from the central bank.

Turkey and the UAE are already on board: Both countries have made moves to integrate MIR into their payments infrastructures. The system is beginning to be rolled out in the UAE while most hotels in Turkey now accept the cards.

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