LONDON: The Palestinian Authority is considering replacing the Israeli shekel as the primary currency in circulation due to its increasing accumulation in the banks.
The Palestine Monetary Authority announced on Sunday that it has taken significant steps to address the growing accumulation of shekels in Palestinian banks after Israeli banks’ continuing refusal to accept the transfer of surplus shekels in exchange for foreign currencies necessary for commerce and business.
The PMA is considering alternative options, including a shift away from using the shekel as the primary currency in circulation, the Wafa news agency reported.
In early June, Israeli Finance Minister Bezalel Smotrich ended a waiver that allowed Israeli banks to engage with Palestinian banks without being scrutinized for money laundering and financing extremism.
Smotrich, who has been outspoken about weakening the Palestinian Authority and opposes the establishment of a Palestinian state, made this decision shortly after being sanctioned by the UK and four European countries for inciting violence in the occupied West Bank.
The PMA said it aims to create a more resilient and sustainable digital economy in Palestine and has consulted various economic sectors and the Union of Chambers of Commerce, Industry, and Agriculture before it makes a final decision. Alongside phasing out the Israeli shekel, the PMA studied digital payment strategies to avoid shekel accumulation in Palestinian banks, Wafa reported.
