Ramallah: The Palestine Monetary Authority (PMA) announced on Sunday that it has taken concrete steps to address the growing crisis of excess Israeli shekel accumulation in local banks.
According to Palestine News and Information Agency - WAFA, the issue stems from Israel's continued refusal to allow the transfer of surplus shekels from Palestinian banks to Israeli ones. As a result, the PMA is now seriously considering alternative options, including transitioning away from the shekel as the primary currency in circulation.
The Authority highlighted the necessity of this move, not only as a response to the current crisis but also as part of a broader alignment with global trends toward digital payment systems. It sees this as a key component of efforts to build a more resilient and sustainable digital economy in Palestine.
In a statement released Sunday morning, the PMA reported holding a series of meetings over the past two weeks with representatives from various economic sectors and the Union of Chambers of Commerce, Industry, and Agriculture. These discussions focused on digital payment strategies and practical measures to alleviate the burden of shekel accumulation in local banks.
PMA Governor Yahya Shunnar has briefed Prime Minister Mohammad Mustafa and other relevant ministers on the Authority's actions to mitigate the crisis. Efforts are ongoing at both local and international levels to pressure Israel into resuming the transfer of excess shekels.
The statement outlined key measures aimed at mitigating the crisis and advancing a transition toward a digital economy. Agreements have been made with chambers of commerce and private sector representatives to enhance financial inclusion. A nationwide effort is underway to expand the use of point-of-sale (POS) systems and electronic payment services across Palestinian shops and businesses.
The PMA emphasized the importance of reducing reliance on cash transactions to ease shekel accumulation in the banking system and reduce associated risks such as theft and counterfeiting. As part of this strategy, the Authority has directed banks to cooperate more closely with key economic sectors, particularly those involved in providing essential goods, and to facilitate international trade financing.
Additionally, banks are encouraged to adopt a more accommodating approach to handling individual cash deposits. The PMA also called on private sector institutions, including merchants, companies, and service providers, to adopt electronic payment methods as a primary tool in daily operations, gradually phasing out dependence on physical cash.
Moreover, the Authority urged banks and electronic payment service providers to offer consumers flexible and secure digital payment solutions. These should include digital wallets, mobile banking applications, credit cards, modern POS devices, and the full use of the iBURAQ instant payment system designed to support fast and reliable transactions across the Palestinian economy.
The PMA assured that it remains committed to exploring all avenues to resolve the shekel crisis and enhance the resilience of the Palestinian economy through digital transformation and financial innovation.
