Türkiye's Ambassador to Palestine and Consul General in Jerusalem, İsmail Çobanoğlu, met with Yahya Shennar, president of the Palestine Monetary Authority, in Ramallah. The meeting, held in the occupied West Bank, addressed the challenges facing the Palestinian banking sector and ways to develop financial cooperation between the two countries.
During the meeting at the headquarters of the Palestine Monetary Authority, Shennar briefed Çobanoğlu on the Palestinian banking sector's most serious problems. Shennar drew attention to correspondent banking relations between Palestinian and Israeli banks, as well as the problem of excess cash in Israeli shekels accumulating in Palestinian banks.
Importance of maintaining banking relations emphasized
Shennar said that maintaining links with Israeli banks was primarily in the interest of the Palestinian banking sector. He said these links were necessary to facilitate money transfers connected to commercial transactions between the sides.
According to data from the Palestinian Central Bureau of Statistics, the monthly volume of trade between the sides is approximately $800 million. Total money transfers in all directions exceed $1 billion per month.
The existing problems were said to be negatively affecting Palestinian banks' capacity to conduct financial and commercial transactions. Shennar emphasized the importance of taking new steps in Palestine-Türkiye relations and expanding cooperation with Turkish financial and banking institutions.
Shennar said this cooperation would enable the Palestinian financial sector to benefit from Türkiye's experience and strengthen its capacity to withstand current challenges. Çobanoğlu also expressed Türkiye's determination to continue supporting Palestine and strengthen cooperation in finance and banking.
Continuation of contacts in Istanbul
The meeting followed Shennar's contacts with Fatih Karahan, governor of the Central Bank of the Republic of Türkiye, in Istanbul in June. Those contacts also addressed the development of financial and banking cooperation between Türkiye and Palestine.
Shekel accumulation and financial crisis
The Palestine Monetary Authority had previously warned of the risks that could arise if Israeli banks ended their correspondent banking relationships with Palestinian financial institutions. It said such a move could have serious consequences for trade, the supply of essential goods and the stability of the Palestinian economy.
The authority had also drawn attention to the negative consequences of Israel's refusal to accept shekels accumulating in Palestinian banks. Under the Paris Economic Protocol signed in 1994, the shekel is widely used to pay for goods and services in the occupied Palestinian territories.
Because Palestine does not have its own national currency, the Monetary Authority supervises and regulates the banking sector under the protocol. These problems emerged as the Palestinian Authority faced a financial crisis deepened by Israel's continued withholding of customs and tax revenues belonging to the Palestinian administration.
Palestinian Finance Minister Estefan Salameh said in a statement on Aug. 25 that the total amount of withheld funds had reached approximately 6 billion shekels, equivalent to about $2 billion.
