Newsletters
The Palestinian economy continues to face “serious risks” because banking relations with Israeli banks depend on temporary arrangements rather than a permanent solution, Palestinian Monetary Authority Governor Yahya Shunnar said.
According to a written statement from the Palestinian Monetary Authority, Shunnar made the remarks during a meeting with European Union Representative to Palestine Andreas Fiedler in Ramallah in the occupied West Bank.
Shunnar said the Bank of Israel had committed to extending banking relations through the end of 2026 but stressed that the move did not provide a lasting solution.
“This extension does not constitute a permanent solution to the financial and banking relationship between the two sides,” he said.
Shunnar said the Palestinian economy would continue to face “serious risks” as long as banking relations with Israeli banks remained dependent on temporary decisions.
He called on the EU to play an active role in resolving the issue and to press for the continuation of banking ties with Israeli banks.
Shunnar said those relations should not remain dependent on temporary decisions or repeated extensions.
Fiedler emphasized the importance of maintaining communication and coordination with the Palestinian Monetary Authority.
The Palestinian Monetary Authority has previously warned about the risks that could arise if Israeli banks sever correspondent banking relationships with Palestinian counterparts.
It said such a move could have serious consequences for trade flows, the supply of essential goods and the stability of the Palestinian economy.
The authority has also warned about the effects of Israel’s continued refusal to accept shekels accumulated in banks operating in Palestinian markets.
The shekel is widely used in transactions and purchases of goods and services in the occupied Palestinian territories under the 1994 Paris Economic Protocol.
Because there is no Palestinian national currency, the Palestinian Monetary Authority is responsible for supervising and regulating the banking sector under the protocol.
The banking challenges come as the Palestinian Authority faces a deep financial crisis amid Israel’s continued withholding of customs tax revenues belonging to the Palestinian administration.
Palestinian Finance Minister Estephan Salame said on Aug. 25 that the withheld funds had reached about 6 billion shekels, or roughly $2 billion.
Set as preferred source
Set as preferred source
1 min read
1 min read
