Quartet lauds transfer of money to Gaza

Mideast Quartet welcomes Bank of Israel's transfer of NIS 50 million to Strip as well as exchange of NIS 31.5 million in spoiled bank notes

Reuters | Published: 07.26.10, 14:37

The Mideast Quartet on Monday published a statement in which it lauded the Bank of Israel's transfer of shekels to the Gaza Strip last week.

"The Office of the Quartet Representative (OQR) welcomes Israel’s decision to allow the entry of NIS 50 million ($13 million) into Gaza as well as the exchange of NIS 31.5 million ($8.2 million) of spoiled bank notes as a first step towards alleviating the liquidity crisis in shekel currency in Gaza," the statement said.

The statement was signed by the Quartet's special envoy, former British Prime Minister Tony Blair.

The statement notes that, "in mid July, the Palestinian Monetary Authority (PMA) requested the entry of NIS 239 million ($62 million) to be transferred from the Bank of Palestine in the West Bank to Gazan bank branches, to deal with the shortage of shekels in the Gaza Strip.

"In addition, the PMA requested the exchange of 31.5 million spoiled shekel notes. The inflow of cash is particularly urgent as Ramadan approaches and salaries are due soon."

According to the Quartet's statement, the Bank of Israel has so far only approved part of the money the PMA requested be transferred to the Strip – NIS 50 million ($13 million) out of NIS 239 million ($62 million).

'Easements increase demand for cash'

The statement added, "The OQR continues to call for a regularized arrangement for the transfer of cash, including the reestablishment of correspondent relations between Israeli and Palestinian banks, which is needed to sustain the long-term health of the Palestinian banking system in Gaza and the West Bank.

"The cash transfer issue has become more pertinent as a result of the change in Israeli policy towards Gaza, which has increased demand for shekels as a result of the greater availability of goods in Gaza."

The Bank of Palestine in Ramallah last week transferred NIS 50 million as part of the Palestinian government's aid to the Hamas leadership in the Gaza Strip. The transfer was carried out under the supervision of the bank of Israel and the Israel Defense Forces.

The Bank of Israel exchanged NIS 31.5 million in used bills, which were transferred via Erez crossing. Hamas claimed that the money was forged, but the Bank of Israel denied the claims.