Palestinian Monetary Authority Warns of Economic Collapse Over Banking Ties

The crisis centers on the fragile network of correspondent banking relationships (CBR) that facilitate Palestine's trade under the Paris Economic Protocol. Speaking at a high-level summit in Ramallah titled "The Breaking Point," Shunnar cautioned that any further disruption to these channels would trigger immediate shortages of fuel, energy, and food. The situation is exacerbated by the ongoing withholding of clearance revenues by Israel, which has already crippled the government’s capacity to deliver essential public services.

The scale of the dependency is stark. In 2025, Israeli correspondent banks processed approximately NIS 51 billion in transactions, serving as the primary conduit for 100% of Palestinian imports and 90% of exports. Currently, nearly NIS 18 billion—roughly USD 6 billion—remains trapped in bank vaults, paralyzing liquidity and stifling the local sector. Representatives from the IMF, UNSCO, and the Central Bank of Jordan joined the assembly to underscore that the window for meaningful intervention is closing. Without a sustainable, guaranteed framework to maintain connectivity with global markets, officials warn the Palestinian financial system faces an imminent and irreversible breakdown.