Russia and Iran have been cooperating to connect their interbank messaging systems in order to bypass the SWIFT financial transactions network, Kazem Jalali, Ambassador of Iran to Russia, said on Thursday.
SWIFT is a messaging network that financial institutions use to securely transmit information and instructions through a standardised system of codes.
Both countries are facing severe Western sanctions, making settlements in trade through SWIFT difficult or impossible.
"We are making efforts in this direction," Jalali told reporters, as quoted by RIA Novosti news agency, RT reported.
Seven Russian Banks Severed from SWIFT
Last month, seven Russian banks were severed from SWIFT, effectively denying them access to international markets. The ban was part of the latest Western sanctions targeting Russia over its military operation in Ukraine.
Russia has its own payment mechanism called the Financial Message Transfer System (SPFS) that has similar functionality and allows the transmission of messages in the SWIFT format. It was created as an analogue to SWIFT that has been developed by the Bank of Russia since 2014.
The ruble had surged on Wednesday after the announcement that payments for gas exports to certain Western countries will be switched to Russia's domestic currency.
The Russian currency immediately rose to a three-week high of 95 rubles against the US dollar, before settling below 100. It also gained 3.5 per cent against the EU's currency, trading at 110.5 rubles per euro.