The threat of Western sanctions has tripped up the recent uptick in Turkish-Russian economic cooperation, with two private Turkish banks halting the use of the Russian payment system Mir and three public banks under pressure to follow suit.

News of the two banks’ move added to turbulence at the Istanbul stock exchange, where an unprecedented rally in banking shares was followed by an equally head-spinning plunge last week, opening a new front of trouble for the struggling Turkish economy.

Wary of a fresh currency shock ahead of elections next year, President Recep Tayyip Erdogan has pinned hope on his Russian counterpart, Vladimir Putin, to help ease Turkey’s foreign exchange shortfall, marked by a gaping current account deficit and hefty foreign debt liabilities in the short term. Russia has agreed to partial Turkish gas payments in rubles and wired billions of dollars to Turkey as part of a nuclear power plant project. In turn, it has gained an economic lifeline thanks to Ankara’s refusal to join Western sanctions over Russia’s invasion of Ukraine. With thousands of Russians flocking to Turkey and Turkish exports to Russia booming, the United States and the European Union have grown concerned that Turkey might be opening room for Russia to evade sanctions.

Following a US Treasury warning against moves facilitating the expansion of the Mir payment system, Isbank — Turkey’s largest private lender by assets — said on Sept. 19 it had suspended Mir transactions and was assessing the statement of the US Treasury’s Office of Foreign Assets Control (OFAC). Later in the day, the Emirati-owned Denizbank said it too had halted services.