The Governor of the Monetary Authority Informs a US Official About the Impact of Financial Challenges on the Palestinian Economy and Citizens' Livelihoods

SadaNews - The Governor of the Palestinian Monetary Authority, Mr. Yahya Shannar, briefed a US official on the challenges facing the Palestinian financial sector, which are threatening the national economy's capacity to support economic activity and meet the needs of citizens and the private sector.

The governor met with a US delegation led by the Economic Affairs Advisor at the US embassy, Mr. Johan Shmonciz, along with his accompanying team, in the presence of Deputy Governor Mr. Mohammed Manasra and several directors of departments.

The governor pointed to the repercussions of the accumulation of excess shekels and its implications for the cash cycle in the economy, and the difficulties this imposes on the banking sector's ability to meet the needs of economic activity and productive sectors, clarifying that the effects extend to commercial movement and reflect on traders and businessmen, which may affect the smoothness of commercial operations and the supply of essential goods and services relied upon by citizens.

Shannar addressed the challenges associated with the ongoing Israeli threats to sever correspondent banking relationships, emphasizing the importance of maintaining this relationship as it is a fundamental pillar for the continuation of the flow of money, trade, and financial services that individuals and companies depend upon.

The governor explained that the continuation of correspondent banking relationships under temporary extensions adds additional challenges to the financial and economic sector and limits the ability to plan and manage the liquidity necessary for financing trade, stressing the need for the Israeli side to adhere to the existing agreements related to correspondent banking relationships and the transfer of excess shekels, and to provide additional shipments that match the volume of accumulated amounts in Palestinian banks and the requirements of the economy.

The governor confirmed that the continued efficient operation of the financial system is a key factor in supporting the national economy and enabling the private sector to continue its activities, and that the Monetary Authority is continuing its efforts in coordination with various international parties to find practical and sustainable solutions to the existing challenges.

For its part, the US delegation emphasized the importance of continuing dialogue and communication with the Monetary Authority and staying informed about the conditions facing the Palestinian financial sector, appreciating the efforts made to maintain its stability and enhance its capacity to face challenges.