West Bank cash surplus strains banks and businesses

An excess of Israeli shekel notes in the occupied West Bank has created a cash surplus that banks cannot absorb. Israeli limits on taking back physical currency and a dispute between the Bank of Israel and the Palestinian Monetary Authority mean commercial banks are forced to reject deposits, raising costs for merchants and prompting temporary closures of gas stations and other outlets.

The shortage of settlement pathways ties up liquidity, reduces bank earnings and threatens timely payments for imported energy, water and food. Palestinian officials describe the situation as “economic warfare,” warning that continued cash overstock could choke imports and further destabilize the territory’s already fragile economy.