$3.5 billion in swap operations is part of five parallel measures the Palestinian Monetary Authority says it is using to ease a shekel accumulation crisis caused by Israeli restrictions on cash transfers.
NIS 18 billion is the annual transfer ceiling for surplus shekels, and Deputy Governor Muhammad Mansara said it no longer matches Palestinian market trading volumes; since October 2023, the issue has been handled by the Israeli government rather than only the Bank of Israel.
$9.5 billion in bank assets has been frozen as a result of the swaps and accumulated cash, while the authority is pressing banks to keep accepting shekel deposits, especially from vital sectors, and telling customers to report unjustified refusals.
A two-year rollout of an electronic payments law is being prepared alongside the crisis response, as officials argue the economy can no longer rely mainly on paper cash under the current transfer restrictions.
Emergency plans also cover a worse-case break in correspondent banking ties, which Mansara said could disrupt external payments and imports of essentials including electricity, fuel and water.