Washington Urges Israel to Extend Cooperation with Palestinian Banks

A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
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Washington Urges Israel to Extend Cooperation with Palestinian Banks

A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)

The United States on Thursday called on Israel to extend its cooperation with Palestinian banks for another year, to avoid blocking vital transactions in the occupied West Bank.

"I am glad that Israel has allowed its banks to continue cooperating with Palestinian banks, but I remain convinced that a one-year extension of the waiver to facilitate this cooperation is needed," US Treasury Secretary Janet Yellen said Thursday, on the sidelines of a meeting of G20 finance ministers in Rio de Janeiro.

In May, Israeli Finance Minister Bezalel Smotrich threatened to cut off a vital banking channel between Israel and the West Bank in response to three European countries recognizing the State of Palestine.

On June 30, however, Smotrich extended a waiver that allows cooperation between Israel's banking system and Palestinian banks in the occupied West Bank for four months, according to Israeli media, according to AFP.

The Times of Israel newspaper reported that the decision on the waiver was made at a cabinet meeting in a "move that saw Israel legalize several West Bank settlement outposts."

The waiver was due to expire at the end of June, and the extension permitted Israeli banks to process payments for salaries and services to the Palestinian Authority in shekels, averting a blow to a Palestinian economy already devastated by the war in Gaza.

The Israeli threat raised serious concerns in the United States, which said at the time it feared "a humanitarian crisis" if banking ties were cut.

According to Washington, these banking channels are key to nearly $8 billion of imports from Israel to the West Bank, including electricity, water, fuel and food.



Türkiye Returns $5 Bn Deposit to Saudi Arabia

Commercial and financial district, home to bank headquarters and renowned shopping centers in Istanbul (Reuters)
Commercial and financial district, home to bank headquarters and renowned shopping centers in Istanbul (Reuters)
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Türkiye Returns $5 Bn Deposit to Saudi Arabia

Commercial and financial district, home to bank headquarters and renowned shopping centers in Istanbul (Reuters)
Commercial and financial district, home to bank headquarters and renowned shopping centers in Istanbul (Reuters)

Türkiye’s central bank has reached an agreement with the Saudi Fund for Development to settle a $5 billion deposit received last year, as part of efforts to reduce external liabilities.
The central bank announced on Wednesday that it had reviewed its international deposit processes to better manage reserves and reduce external debts. A bilateral agreement was reached with Saudi Arabia to end the $5 billion deposit deal made last year.
The deposit, placed on March 6, 2023, was part of a broader strategy to strengthen relations between Türkiye and Saudi Arabia, following directives from King Salman and Crown Prince Mohammed bin Salman.
This repayment signals a positive shift in Türkiye’s economic management under Finance Minister Mehmet Şimşek, who has focused on reducing the central bank’s foreign exchange interventions and improving the country’s financial stability.
Central Bank Governor Fatih Karahan noted that the bank had largely stopped swap operations with local banks and was reviewing international agreements. Experts see this as a step toward a more straightforward monetary policy.

In a social media post, Şimşek highlighted that Türkiye’s reserves had strengthened due to increased foreign inflows and reduced reliance on external financing, and he confirmed ongoing economic and financial cooperation with Saudi Arabia.
In other news, Fitch Ratings said that Gulf Cooperation Council (GCC) banks are showing a strong appetite to grow their presence in major regional markets, particularly Turkiye, Egypt and India, attracted by improving economic conditions and better growth opportunities than in their domestic markets.
Fitch Ratings noted that Several GCC banks are reportedly looking to acquire banks in Turkiye, Egypt and India. The agency said it believes external growth is part of some GCC banks’ strategy to diversify business models and improve profitability. By deploying capital into high-growth markets.