Russia’s possible exclusion from SWIFT poses no threat to Georgian remittances

President of the National Bank of Georgia Giorgi Kadagidze does not see any threat to Georgia if the European Union (EU) decides to exclude Russia from Society for Worldwide Interbank Financial Telecommunication (SWIFT).

The European Parliament urged the EU to consider excluding Russia from SWIFT, an international financial network, as an additional sanction for its role in the Ukraine conflict.

Such a measure would complement tough economic sanctions targeting major Russian banks, energy and defence companies imposed earlier this month by the EU.

At a special briefing today Kadagidze said imposing new sanctions could have serious implications on the Russian banking system but "there are more than ten money transfer services which are able to implement remittances bypassing Russian banking systems”. Therefore he believed the sanctions would not adversely affect Georgia.

Remittances from Russia accounted for $67 million USD - more than half of total remittances ($130 million USD) to Georgia in August. 

In general, when compared to the same period last year, remittances from Russia to Georgia decreased by about $5 million USD.

"If we speak about Georgia's business and economy, after the Russian embargo in 2006 our economy's exposure to Russia has decreased practically to the minimum," Kadagidze said adding Georgians should "remain calm” about this issue.

He said just because Georgia's dependence on the Russian economy was minimal, international rating agencies and organisations considered the country was in a "less riskier countries group” compared to other countries in the region.

Meanwhile the EU proposal to remove Russia from SWIFT was denounced by SWIFT, with the reason being: "singling out of SWIFT in this manner interferes disproportionately with its fundamental right to conduct business and its right to property”.