(photo credit: Ariel Hermoni / Defense Ministry)
Defense Minister Ehud Barak last week approved a request for banks in the Gaza Strip to invest NIS 282.5 million in the Bank of Israel, as a humanitarian gesture to rid Gaza’s banking system of excess currency.
The cash will be returned to Gazan banks with interest in the future.
The request was made by the Palestinian Monetary Authority due to an accumulation of shekel bills in the Strip’s banking system, according to a statement released last week by the spokesman from the Office of the Coordinator of Government Activities in the Territories (COGAT).
The excess cash is threatening to decrease the value of currency in Gaza and deflate prices, which could cause Gazans to lose confidence in their banking system. Many Gazans only recently began depositing their salaries in banks.
The money transfer from the Palestinian Monetary Authority will “allow the continuance of trade and the existing banking system activity in the Gaza Strip,” the COGAT statement said.
“The coordinating of the money transfer is a part of the humanitarian effort made for the citizens of Gaza. These efforts are done on a daily basis on all levels,” the statement read.