There seems to be new activity toward establishing a long-awaited Palestinian central bank.

Palestine Monetary Authority (PMA) Gov. Azzam Shawwa revealed Jan. 14 that arrangements are being made for the bank, though he provided no details. He had noted in a Dec. 23, 2019, interview with the Saudi Mubasher Info news website that Palestinians have been dreaming of turning the PMA into a central bank for several years now. These expectations follow a decade of efforts that are to culminate with President Mahmoud Abbas’ ratification of the 2015 Banking Law, which deals with the Palestinian central bank specifically.

This declaration shed light on the bank's possible intended purpose and existing banks' attitudes toward the effort. There are concerns that the Palestinian Authority (PA) might seek to control the banking sector, and some in the industry also believe there are political conditions and obstacles that might hinder a central bank's establishment.

A PMA official told Al-Monitor on condition of anonymity that efforts to form a central bank started in 2006 with the adoption of the PMA strategy. "The PMA began drafting the banking law in 2015 following in-depth discussions with local and international authorities including faculties of economics in Palestinian universities, local Palestinian banks, Arab banks and the International Monetary Fund (IMF)," he said.