Publication
Omar Shaban Ismail · Al-Monitor · 2013
Al-Monitor 2013 analysis arguing that a Palestinian currency has no realistic prospects given current conditions: Palestinian governance lacks monetary policy independence, a productive exchange-generating economy, and political stability — all prerequisites for currency viability.
Al-Monitor 2013 analysis arguing that a Palestinian currency has no realistic prospects given current conditions: Palestinian governance lacks monetary…
Editorial summary — the full article is published by Al-Monitor and cannot be reproduced here. What follows is an account of the subject written afterwards, not the original text.
The prospects for a Palestinian currency — an independent monetary unit separate from the Israeli shekel and the Jordanian dinar that currently serve as Gaza and West Bank legal tender respectively — are, as this 2013 analysis argues, practically nonexistent given the current political conditions. A viable currency requires a central bank with monetary policy independence, a productive economy capable of generating foreign exchange, control over trade and capital flows, and a stable political environment. Palestine has none of these prerequisites. The Palestinian Monetary Authority operates in the West Bank under significant constraints, with no ability to conduct independent monetary policy while the shekel dominates transactions. Gaza uses the shekel and the dinar alongside Egyptian pounds, reflecting the territory's economic connections to multiple external economies. Any Palestinian currency would immediately face a credibility crisis: investors and citizens would need to trust that the currency could maintain value, which requires institutions and economic fundamentals that Palestinian statehood under occupation cannot provide.
Topic: Palestinian Economy — Currency · monetary policy · independence — Text © Al-Monitor — archived here with attribution to the source. — Original source