Why Palestinians put money in banks instead of investing
The Palestinian Monetary Authority recently announced that customer deposits in local banks have reached $12.2 billion, a large amount that some economists question, given the deteriorating economy in the Palestinian territories.
RAMALLAH, West Bank — Instability plaguing Palestinian political and economic conditions appears to be dissuading Palestinians from investing their savings, given the high risks that investments entail there. However, people's preference for the safety of banks has created impressive growth in deposits.
Palestinian Monetary Authority (PMA) Gov. Azzam Shawwa said during an Oct. 2 workshop in the northern West Bank city of Nablus that individual customer deposits in Palestinian banks amounted to around $12 billion as of the end of August, which is a high figure in light of the deteriorating economic situation in the Palestinian territories.
In an exclusive interview with Al-Monitor, Shawwa said total bank deposits amounted to about $13.3 billion at the end of August. About 92% of that amount, or $12.2 billion, was deposited by individuals, while the rest came from local institutions and companies.
"In 2018, bank deposits grew by 6.7% year over year," he noted. “Customer deposits grew at an annual rate of 8.5% over the last decade, reflecting customer confidence in the Palestinian banking industry."
