Surge in Demand for Foreign Currencies in West Bank
In recent weeks, the West Bank has witnessed a dramatic increase in demand for foreign currencies, particularly the US dollar and the Jordanian dinar. This surge is attributed to a combination of factors, including the closure of the Karameh crossing with Jordan following violent incidents and rumors surrounding the potential withdrawal of the 200 shekel bill from circulation. The Palestine Monetary Authority (PMA) has mobilized its teams to inspect exchange offices and banks to address these unprecedented developments in the currency market.
Currency Exchange Rates Diverge
Exchange offices in the West Bank have been purchasing foreign currencies at rates exceeding the limits set by the Central Bank of Israel, leading to the emergence of a potential parallel market. Currently, two distinct exchange rates are prevalent: one offered by local banks, which is linked to the shekel's performance, and another from exchange shops that operate with wider margins. The PMA has issued warnings to these shops and has implemented regulations to control currency trading practices, including a cap on transactions exceeding $20,000.
Regulatory Measures by the Palestine Monetary Authority
In response to the volatility in the currency market, the PMA has taken decisive actions to restore order. They have set a maximum margin of 200 basis points between buying and selling prices for currencies and have threatened to close non-compliant exchange offices. Additionally, the PMA has refuted claims regarding the discontinuation of the 200 shekel bill, assuring the public that there are no issues with its circulation. As the situation evolves, the PMA remains vigilant to stabilize the West Bank's economy amidst ongoing regional tensions.
