Israel Extends Banking Cooperation with Palestinian Banks

Israel's finance minister has extended a crucial waiver permitting cooperation between its banking system and Palestinian banks, critical for the Palestinian economy. The extension, backed by U.S. Treasury Secretary Janet Yellen, ensures the smooth processing of transactions and maintains financial stability in the West Bank and Gaza.

Israel's finance minister has extended a waiver that allows cooperation between its banking system and Palestinian banks in the occupied West Bank, the minister's spokesperson said on Sunday.

The waiver, which was due to expire at the end of June, allows Israeli banks to process shekel payments for services and salaries tied to the Palestinian Authority. Without it, the Palestinian economy would have taken a hit. Finance Minister Bezalel Smotrich extended the waiver during a recent cabinet meeting, his spokesperson said.

U.S. Treasury Secretary Janet Yellen has said it was important to keep open the Israeli-Palestinian correspondent banking relationships to allow battered economies in the West Bank and the Gaza Strip to function and help ensure security. The Palestinian economy relies heavily on this relationship to process transactions made in Israeli shekels.

Some 53 billion shekels ($14 billion)were exchanged at Palestinian banks in 2023, official data show. ($1 = 3.7656 shekels)