Palestine Monetary Authority warns of economic risks from temporary banking ties

Yahya Shennar, Governor of the Palestine Monetary Authority, has warned that the Palestinian economy faces serious risks due to the temporary nature of correspondent banking relationships with Israeli banks. While the Bank of Israel has committed to extending these banking relationships until December 31, 2026, Shennar emphasized that this extension does not constitute a permanent solution for financial and banking stability.

During a meeting with Andreas Fiedler, the European Union representative to Palestine, Shennar called on the EU to play an active role in addressing this issue. He urged the international community to pressure Israeli banks to ensure the continuity of these relationships, noting their vital importance for trade movement, supply chains, and essential payments for citizens.

Shennar highlighted that the Palestinian banking sector remains committed to international standards regarding anti-money laundering and combating the financing of terrorism to maintain global trust. The Palestinian Monetary Authority has previously cautioned that the potential severance of these ties could lead to severe consequences for economic stability and the supply of basic goods.