Economy & Aid
Smotrich signs waiver keeping shekel payments open past 2026
Economy & AidGraphic: Times of Palestine
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Two Israeli banks, Discount and Hapoalim, told their Palestinian counterparts this month they would stop the correspondent-banking services that let Palestinian banks process shekel transactions — Discount from 1 September, Hapoalim from 1 October — before Finance Minister Bezalel Smotrich signed an indemnity waiver keeping both arrangements open through the end of 2026, the Times of Israel reported.
Why a signature can halt an economy#
Almost every wage, invoice and import bill in the West Bank is priced in shekels, a currency the Palestinian Authority does not issue and cannot settle on its own. To move money between the Palestinian banking system and anywhere else, an Israeli bank has to stand in the middle, and those banks have spent years asking Israel to indemnify them against lawsuits arising from that role.
Discount Bank said it had "complied for years with requests of Israeli authorities to continue providing these services on a temporary basis" — a description of a system this newsroom first reported on 14 August, when the UN's deputy special coordinator for the Middle East, Ramiz Alakbarov, told the Security Council the arrangement's survival depended on a waiver renewed at intervals, welcome each time but never a durable fix.
What changed, and what has not#
The threatened September and October cutoff dates would have severed the shekel-clearing channel Palestinian banks depend on for imports and exports. Smotrich's signature averts that immediate cliff and extends it past the 27 October Knesset election. It does not resolve the underlying dependency Alakbarov described: Palestinian financial stability still rests on a waiver Israel's finance minister can withhold, sign only under pressure, or set to expire again.
