PMA Urges Global Community to Address Banking Crisis Threatening Palestine's Economy

In a crucial high-level meeting convened by the Palestinian Monetary Authority (PMA), Governor Yahya Shunnar has raised alarm bells regarding the severe implications of severed correspondent banking relationships (CBR). This urgent call, which included attendance by ambassadors and financial representatives, emphasizes the dire situation facing the Palestinian economy. Governor Shunnar articulated that ongoing Israeli measures are pushing the Palestinian economy to the brink of collapse, jeopardizing food security and essential services for its residents.

Under the title "The Breaking Point: Sounding the Alarm Before the Collapse," the meeting convened various key figures, including Governor of the Central Bank of Jordan Dr. Adel Al Sharkas, Arab Monetary Fund Chairman Dr. Fahad Al Turki via video link, IMF Resident Representative Mr. Tobias Roy, and UNSCO Senior Adviser Mr. Hansjoerg Strohmeyer, among others. Their collective insights highlighted the precarious state of banking relations, which are essential for Palestinian trade under the Paris Economic Protocol.

During his remarks, Governor Shunnar reiterated the importance of these banking relationships, urging the international community to take immediate measures to sustain CBRs. He emphasized that these arrangements facilitate the import of goods and services from Israel and beyond, stating that any interruptions could lead to catastrophic outcomes, not just in financial terms but also in severe humanitarian crises.

With 90% of Palestinian exports headed towards Israel and 100% of imports either passing through or originating from it, Shunnar underscored the significance of Israeli correspondent banks, which processed approximately NIS 51 billion in transactions for 2025. He noted that nearly NIS 18 billion (around USD 6 billion) is currently immobilized in bank vaults, highlighting the banking sector's constraints that further impact economic activity.

The meeting participants acknowledged that the opportunity for meaningful intervention is dwindling, and immediate actions are essential to avert a total breakdown of these vital financial connections. They called for coordinated efforts to forge stable and sustainable banking arrangements that would maintain the Palestinian banking sector's involvement in the global financial system.

As tensions escalate due to the political situation, the need for proactive measures has never been more pressing. The consequences of inaction could ripple through the economy, causing fuel, energy, and food shortages, along with skyrocketing prices, unemployment, and worsening poverty levels among the Palestinian people. All these factors are compounded by Israel's withholding of clearance revenues, further crippling the Palestinian government's capabilities to fulfill its obligations and provide necessary services.

In conclusion, the PMA's urgent appeal serves as a reminder of the interconnectedness of banking relationships and overall economic health. The international community's response will be critical in shaping the future of Palestine's economic landscape, ensuring that access to essential goods and services remains uninterrupted and that the humanitarian challenges do not escalate into a full-blown crisis. Only through coordinated global efforts can stability be maintained, and the Palestinian economy be protected from the brink of collapse.