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The economy is not doing well in the Israeli-occupied West Bank. Since the war in Gaza began in 2023, Israel has prevented Palestinians from working in the country and has withheld tax and customs money from the West Bank. Now another unexpected problem is hobbling financial life in the Palestinian territory - a glut of cash and nowhere to store it. NPR's Emily Feng explains.
EMILY FENG, BYLINE: It's the lunch rush hour at this gas station in the West Bank, and Hassan Abu Shebaya (ph) is in a particular hurry to get his coffee and smoothie to go.
HASSAN ABU SHEBAYA: (Speaking Arabic).
FENG: "I need to make it to the bank before they close in the afternoon," he says, "to deposit money."
SHEBAYA: (Speaking Arabic).
FENG: "And depositing money is no easy task in the West Bank these days," he says.
SHEBAYA: (Speaking Arabic).
FENG: Because personal accounts like his have a deposit limit of 5,000 shekels a month, he explains - about $1,600.
ADNAN AL MAQITI: (Speaking Arabic).
FENG: For businesses like Adnan al Maqiti's (ph) butchery shop, this cap on deposits is stifling. His business account lets him deposit up to the equivalent of $6,000 a month, but it's not enough to pay for the thousands of dollars of meat that stocks his shop or the thousands more in his employees' salaries.
A AL MAQITI: (Speaking Arabic).
FENG: So he says he frequently writes checks which accidentally bounce because, while he has cash, he does not have enough money in his account. This is the dilemma facing most Palestinians in the West Bank today. Even if you have money in paper form, like in cash, getting that money into a bank so you can pay debts, import goods or pay off a mortgage is becoming harder and harder.
YAHYA SHUNNAR: And that is suffocating the trade cycle between us and Israel.
FENG: This is Yahya Shunnar, the head of the Palestinian Monetary Authority. He explains the West Bank uses Israel's currency, the shekel, and so Israel controls the West Bank's financial connections with the outside world. And the problems begin in 2022.
SHUNNAR: Ever since this new government in Israel took over office in 2022, where they started putting restrictions on shipping extra shipments.
FENG: Shipments of currency they would accept.
SHUNNAR: So it's a kind of a punishment to us.
FENG: Israeli officials say they halted cooperation over concerns of exposure to possible terror financing and money laundering. As a result, Shunnar says, there is more than $5 billion worth of shekels stuck inside the Palestinian territory - so much idle cash that it is literally decaying in bank vaults that are filled to bursting.
SHUNNAR: Part of it will go rotten.
FENG: From the humidity.
SHUNNAR: It is literally shekels sitting in the banks. I have here under - in this building, in Minus 4, more than 8 billion shekels.
FENG: And this is why Palestinian banks have limited deposits. They have too much cash already. Even greater disaster is looming. Two major Israeli banks - Discount and Hapoalim banks - say they will cut off ties with Palestinian institutions in the West Bank as soon as this September. Shunnar says, if they do so, the results will be catastrophic for Palestinians.
SHUNNAR: Gradually, you will face interruption of basic foods and services coming to Palestine. You will have an interruption of basic fuel.
FENG: Because 100% of the West Bank's fuel and nearly all of its electricity is bought from Israel.
SHUNNAR: You will have black market. You will have a chaos.
UNIDENTIFIED PERSON #1: A kilo.
UNIDENTIFIED PERSON #2: Kilo.
FENG: Cracks are already starting to show as Palestinians open up extra accounts under their children's names and scrounge for extra checks. For Tariq al Maqiti (ph), even a car payment is a struggle.
TARIQ AL MAQITI: (Speaking Arabic).
FENG: He wrote the seller a check for about $1,000 in shekels, but the bank wouldn't let him deposit money beforehand.
T AL MAQITI: (Speaking Arabic).
FENG: And his check bounced.
Emily Feng, NPR News, Ramallah, the West Bank.
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