Erdogan convenes meeting to discuss sanctions on Russia in possible turnaround

Turkish President Tayyip Erdogan will convene a top-tier economy-focused meeting on Friday at which Russian payment system Mir and possible Western sanctions will be discussed, two sources with information on the matter told Reuters.

The meeting with government officials and others will also address agreements with Russia, recent heavy volatility on the Istanbul stock exchange and the general economic situation, the sources said, requesting anonymity.

Two private Turkish banks, Denizbank and Isbank, suspended use of Mir this week after Washington expanded its sanctions on Russia over its invasion of Ukraine, including targeting the head of the entity that runs the payments system.

NATO member Turkey opposes Western sanctions on Russia on principle and has close ties with both Moscow and Kyiv, their Black Sea neighbors. It also condemned Russia's invasion and sent armed drones to Ukraine as part of its diplomatic balance.

Yet Western nations are growing concerned over increased economic ties between Turkey and Russia, diplomats say, particularly after several meetings between Erdogan and President Vladimir Putin, including last week in Uzbekistan.

Earlier on Thursday, the head of Russia's National Card Payments System said Mir bank cards continued to work in Turkey, despite the two banks suspending them.

Russia's central bank vowed last week to push ahead with expanding the number of countries that accept its Mir cards.

The U.S. sanctions target people and entities accused of helping Moscow skirt financial sanctions. Last month the U.S. Treasury sent a letter to big Turkish businesses warning they risked penalties if they maintained commercial ties with sanctioned Russians.

Earlier this week, a senior U.S. administration official said Washington expects more banks will cut off Mir over sanctions risk and added that the suspension decisions by Isbank and Denizbank made a lot of sense.

Separately, on the Istanbul bourse, bank shares have tumbled sharply since last week after a strong rally since July, prompting the country's clearinghouse to amend risk parameters to help ease the pressure.