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Israel’s decision to allow entry of shekels into Gaza welcome but more is needed
Monday, Jul 19, 2010 in Office of the Quartet Representative
The Office of the Quartet Representative welcomes Israel’s decision to allow the entry of 50 million shekels into Gaza as well as the exchange of 31.5 million shekels of spoiled bank notes as a first step towards alleviating the liquidity crisis in shekel currency in Gaza.
In mid July, the Palestinian Monetary Authority (PMA) requested the entry of 239 million shekels to be transferred from the Bank of Palestine in the West Bank to Gazan bank branches, to deal with the shortage of shekels in the Gaza Strip. In addition, the PMA requested the exchange of 31.5 million spoiled shekel notes. The inflow of cash is particularly urgent as Ramadan approaches and salaries are due soon.
The OQR continues to call for a regularised arrangement for the transfer of cash, including the reestablishment of correspondent relations between Israeli and Palestinian banks, which is needed to sustain the long-term health of the Palestinian banking system in Gaza and the West Bank. The cash transfer issue has become more pertinent as a result of the change in Israeli policy towards Gaza, which has increased demand for shekels as a result of the greater availability of goods in Gaza.
The OQR continues to work with both sides to ensure that the new policy on the entry of items is implemented fully, that all items for daily life are allowed to cross and that the capacity of the crossings is increased to meet this demand.