West Bank Banks Struggle With Shekel Cash Glut as Israel Limits Returns
Banks are paying to store and insure billions of shekels as the Bank of Israel’s transfer cap leaves cash trapped in the West Bank.
- In the Israeli-occupied West Bank, banks are struggling with a massive surplus of physical Israeli Shekels they cannot return to Israel, which limits annual cash transfers to 18 billion shekels .
- The excess liquidity stems from a conflict between the Bank of Israel and the Palestinian Monetary Authority, as the Palestinian economy runs almost exclusively on physical currency, accumulating an estimated 30 billion shekels annually.
- Last month, gas station owners including 22 operated by Al-Huda held a 30-minute strike after banks stopped accepting cash deposits; businesses now resort to taking out loans or buying other currencies while paying more for storage.
- Mohammad Manasra, deputy governor of the Palestinian Monetary Authority, said the glut is "directly affecting the government's ability and the private sector's capacity to continue providing services," while business leaders fear it will eventually prevent importing fuel, food and medical supplies.
- A 2022 International Monetary Fund study estimated excess cash reduced Palestinian banks' profits by about 20%, though economists say the impact is likely much higher today, as fears of looting by Israeli soldiers have worsened the problem.
23 Articles
23 Articles
Santa Maria Times
Independent EspañolRAMALA, West Bank (AP) — Imagine this: a customer at a gas station takes out a bundle of tickets to pay for filling the tank. The cashier rejects the money and explains that the station’s bank has stopped accepting tickets...
Too much cash hits Palestinian economy in West Bank
West Bank: A gas station customer pulls out a wad of bills to pay for a fill-up. The cashier refuses the money, explaining that the station’s bank has stopped accepting notes and coins as deposits because it already is drowning in cash. In most places, cash is king. But in the Israeli-occupied West Bank, having too much is gumming up the machinery of daily life. The Palestinian banking system has more Israeli shekels than it can manage. As a res…
Associated Press News
The Palestinian economy is struggling. In the West Bank, the problem is too much cash
In most places, cash is king. But in the Israeli-occupied West Bank, having too much is gumming up the machinery of daily life.
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