Mohammad Manasra warns that a surplus of Israeli shekels is creating a state of economic warfare in the West Bank.
Mohammad Manasra, the deputy governor of the Palestinian Monetary Authority, stated that the West Bank banking system is currently struggling with an overabundance of physical currency. Because the Bank of Israel limits the amount of cash it accepts from the territory, Palestinian banks are running out of vault space to store the notes. The surplus stems from a system where the Palestinian economy relies heavily on physical cash, while Israel limits the annual transfer to 18 billion shekels. This creates a bottleneck, as banks cannot easily convert the excess cash into electronic balances to pay for imports or process transfers. Mohammad Manasra noted that this "economic warfare" affects the ability of the private sector to provide essential services like fuel and electricity. The cash glut has also impacted bank profitability, with some estimates suggesting it reduced profits by 20% in 2022. Business leaders warn that if the problem is not resolved, the lack of liquid funds could eventually cause various industrial sectors to collapse.