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No Prospects for Palestinian Currency

With Israeli maintaining control of the Palestinian economy and internal divisions stalling reconciliation, a Palestinian currency seems little more than a dream, writes Omar Shaban.
A Palestinian woman makes a withdrawal at the Housing Bank for Trade & Finance in the West Bank city of Ramallah January 22, 2013. A central bank in the making, the Palestine Monetary Authority (PMA) is a rare bright spot as the economy of the Palestinian territories struggles with Israeli sanctions. Enforcing on Palestinian banks a regimen of conservative lending that has kept bad loans minimal and guaranteed liquidity, the PMA's technocratic prowess is the pinnacle of a Palestinian drive to build institut
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Reinstating the Palestine pound has long been a dream for Palestinians. Nevertheless, amid the Palestinians’ eagerness to consolidate their sovereignty and in view of the reality of the Palestinian economy that is controlled by Israel, not to mention the losses and challenges that could result from such a step, it seems that this Palestinian dream still has a long way to go before becoming a reality.

During the era of the Ottoman Empire, the Ottoman lira was the currency circulated in Palestine. With the beginning of the British Mandate, the pound sterling was introduced and was linked to the Egyptian pound. In the late 1940s, the government of the British Mandate decided that the time had come to issue a Palestinian currency. This decision, however, was strongly rejected by Palestinian civil organizations — such as the Christian-Muslim association in Haifa, the chambers of commerce and national forces. They were opposed to this step on the basis that the Palestinian government was not independent, as it operated under the control of the British High Commissioner.

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