Gaza: Deputy Governor of the Palestinian Monetary Authority (PMA) Mohammad Manasra has pointed out that Israeli-imposed restrictions are the primary cause of the growing accumulation of Israeli shekels in the Palestinian banking sector. He emphasized that these restrictions limit the transfer of surplus cash, prompting the PMA to explore various strategies to alleviate the crisis and expand electronic payment systems.
According to Palestine News and Information Agency - WAFA, Manasra clarified in an interview that the recent law aimed at decreasing cash transactions is intended to build a more efficient and secure economy reliant on electronic payments, rather than to inconvenience citizens. For the law's successful implementation, he highlighted the necessity of establishing a comprehensive electronic payments infrastructure accessible to all sectors and regions.
Manasra stated that the PMA has conducted numerous meetings with private sector representatives, chambers of commerce, and professional unions, resulting in a plan for the gradual implementation of the law over a two-year period. This plan considers the specific needs of each economic sector to address the shekel accumulation crisis alongside the law's enactment before the issuance of executive regulations.
He further noted that due to Israeli restrictions on shipping excess cash, reliance on paper currency is unsustainable. This situation underscores the economic necessity of expanding electronic payment systems. Responding to reports of banks refusing shekel deposits, Manasra assured that the PMA is closely monitoring the issue and acknowledges the difficulties faced by citizens and businesses.
Manasra explained that the problem arises not from banks' refusal to accept deposits but from Israeli restrictions on transferring surplus shekels out of the Palestinian market. He stated that the current annual transfer ceiling of approximately 18 billion shekels no longer matches the cash volume circulating within the Palestinian economy. The PMA is actively working with the Bank of Israel and international partners to increase the transfer quota or authorize additional shipments.
He also mentioned that the responsibility for managing these issues shifted to the Israeli government after October 2023, although banks must continue accepting shekel deposits to ensure the continuity of payments, trade financing, and the supply of essential goods. Manasra disclosed that swap operations have resulted in the freezing of approximately $9.5 billion in banking assets, placing an undue burden on Palestinian traders.
Manasra stressed the importance of banks accepting deposits under PMA regulations, which require consistency between the source, amount, and nature of the funds and the account holder's financial activity. He urged those facing unjustified deposit refusals to file complaints with the PMA for investigation.
He warned that any termination of correspondent banking relations by the Israeli side could severely impact supply chains and international payments, potentially affecting vital imports such as electricity, fuel, and water. The PMA, as Manasra noted, continues to collaborate with local and international partners to prevent such outcomes and maintain the stability of the Palestinian economy.