Palestine: Israel's temporary banking decisions expose our economy to serious risks

According to the written statement made by the Palestinian Monetary Policy Board, Şennar met with the European Union (EU) Palestinian Representative Andreas Fiedler in the occupied West Bank city of Ramallah.

Pointing out that the Bank of Israel has committed to extend banking relations until the end of 2026, Şennar said, "This extension does not constitute a permanent solution to the financial and banking relations between the two parties." he said.

Şennar stated that the Palestinian economy "continues to face serious risks" because its banking relations with Israeli banks are dependent on temporary decisions.

Stating that the EU should play an active role in solving this problem and press for the continuation of banking relations with Israeli banks, Şennar noted that the continuity of these relations "should not remain hostage to temporary decisions or extensions."

EU Representative to Palestine Fiedler also emphasized the importance of maintaining communication and coordination with the Palestine Monetary Policy Board.

Israel-related difficulties and financial crisis

The Palestinian Monetary Policy Committee had previously warned of the risks posed by the possibility of Israeli banks cutting correspondent banking relations with their Palestinian counterparts.

It was stated that this situation could have serious consequences on trade mobility, supply of basic goods and the stability of the Palestinian economy.

The Board also drew attention to the negative effects that would be caused by Israel's continued avoidance of receiving the shekels accumulated in banks operating in the Palestinian markets.

Shekel is widely used in transactions and purchases of goods and services in the occupied Palestinian territories within the framework of the Paris Economic Protocol signed in 1994.

In accordance with the protocol, the Palestinian Monetary Policy Board carries out the task of supervising and regulating the banking sector due to the absence of a national Palestinian currency.

These difficulties in the banking sector are happening amidst the deep financial crisis the Palestinian government is in, as Israel continues to withhold "customs duty revenues" belonging to the Palestinian government.

Palestinian Finance Minister Estephan Selame stated in his statement on August 25 that the amount of these detained funds reached approximately 6 billion shekels (approximately 2 billion dollars).