Xinhua
11 Jun 2025

RAMALLAH, June 11 (Xinhua) -- The Palestinian Monetary Authority (PMA) on Wednesday warned of potential economic repercussions if Israeli authorities proceed with threats to sever banking relations with Palestinian financial institutions.

In a press statement, the PMA said that any disruption in banking ties could result in the suspension of essential goods supply to the local market, including food, fuel, electricity, and water.

The statement expressed concern over Israeli threats to cancel the correspondent banking relationship between the two sides, warning that such a move would hinder trade transactions and payment mechanisms for critical goods and services.

The PMA affirmed it was working in coordination with Palestinian political leadership and international stakeholders to ensure the continuity of banking relations and the uninterrupted flow of goods and services to Palestinian markets.

The authority stressed that depositors' funds in Palestinian banks remain secure, and that the banking sector maintains strong financial solvency in line with international standards.

It also noted that the Palestinian banking system remains integrated with the global financial network through an extensive network of international banks, allowing the continued provision of financial services both domestically and abroad.

Israeli Finance Minister Bezalel Smotrich's office said on Tuesday that he had directed the Finance Ministry's accountant-general to waive the indemnity that Israeli banks have been given to correspond with Palestinian banks, the Times of Israel reported.

"The Palestinian economy relies heavily on the banks' relationships with their Israeli counterparts to process transactions made in shekels, as the PA (the Palestinian Authority) does not have its own currency," noted the Times of Israel.