Ramallah: The Palestinian National Authority (PNA) plans to adopt the Jordanian or US currencies instead of the Israeli shekel in the Palestinian commerce and daily transactions as part of the PNA’s strategy to gradually decrease coordination with Israel reaching a point of cutting off relations with the occupier.

According to Dr Nabeel Sha’ath, a key aide to Palestinian President Mahmoud Abbas, the Palestinian Monetary Authority and Ministry of Finance and Economy are quietly considering and studying abandoning the Israeli shekel in the Palestinian territories.

Dr Sha’ath who is also Fatah Central Committee member and Fatah Commissioner of International Relations told the Palestinian Radio on Wednesday that the Palestinians, as per the agreements signed with Israel, could use the US dollar or the Jordanian dinar in their commerce and transactions, but the Palestinians with the passage of time mainly used the Israeli shekel. He stressed that the Israelis insist on using only the shekel in their commerce with the Palestinians and categorically refuse to do any business with the use of the US currency. Therefore, he said, it was time to abandon the Israeli shekel in Palestine.

Over the past decades, the Palestinians have mainly used the Israeli shekel for commerce, but had considered reissuing the defunct Palestine pound as a key aspect of statehood. The Palestinians had found that this was unrealistic as they could not function independently of Israel.

“We fully support abandoning the Israeli shekel from the daily life of Palestinians,” said Dr Nasr Abdul Kareem, an expert economist in the West Bank. “Adopting another currency in Palestine is just a right position but that should be done gradually, quietly and realistically.”

He stressed that adopting a new currency in Palestine should be carefully considered and implemented where the Palestinian economy must be restructured giving the residents the chance to settle their shekel transactions.

“Four billion shekels in salary income of the Palestinian workers in Israel in addition to four more billion shekels trade volume between Israel and the Palestinians should be carefully tackled,” he told Gulf News.

“The Israeli reaction to the suspension of the shekel and adoption of another currency must also be carefully reviewed and evaluated in advance. Israel can easily impose collective economic punitive measures against the Palestinians.”

Dr Abdul Kareem, who is sceptical that the Palestinians can instantly abandon the shekel as this can further increase the instability of the Palestinian economy, said the Palestinian banks are closely tied to their Israeli counterparts which constitute the only window to the world, given the fact that most of the Palestinian banks do not have branches abroad. “Abandoning the Israeli shekel and adopting another currency will and should take a long time — three to four years — and should be implemented gradually,” he said.

Politically, abandoning the shekel is a fundamental move in the process of cutting relations with Israel and Palestinian politicians believe that the damage caused by the way the Israeli ruling coalition treats the Palestinians is more severe than the dangers from currency. The Palestinians are optimistic to manage the currency shift successfully and with no relative implications.