When the Israeli central bank took over the reins from Israel’s central bank in January, the aim was to ease the strain on banks and boost lending to the Palestinian Authority, the PA’s central government.
But the transition has now shifted into something far more serious: the central bank is taking over the banks of the Palestinians, with the aim of easing the burden on them.
“The bank is now trying to make sure that the banks that are part of the [Palestinian] economic sphere, the Palestinian banks, are able to withstand the pressure,” says a senior Israeli official.
The central bank has already set aside more than 100 billion shekels ($15.8 billion) to help Palestinian banks.
The plan is to use a special $50 billion fund to lend to the banks to ease pressure on the Palestinian economy.
It is the first time a Palestinian bank has been given a central bank loan to help it survive the turmoil caused by the conflict between Israel and the Palestinians.
But it is a plan that has raised eyebrows in the West Bank.
While the bank is not allowed to use the funds to help Palestinians outside the Palestinian territories, Israel’s security and financial institutions are using the funds for projects that could benefit the Palestinians in other ways.
Israel’s Channel 2 news reported that the central banks’ fund was meant for projects to support infrastructure in the Palestinian West Bank, including construction of roads and other infrastructure.
The channel said the plan was approved in May 2016 but was delayed by the Palestinian government’s opposition to the idea.
But Israeli officials say that the funds were meant to help the Palestinian governments, not the Palestinian central bank.
The funds are meant to support the Palestinian people, not for the Palestinians to run the banks, they told The Associated Press.
The central bank said it was only following guidelines that the Palestinian Finance Ministry has laid out, such as how the money should be used.
Israel’s Central Bank said it has decided to use only the funds that the finance ministry had put in place for projects in the occupied West Bank that were approved by the PA, not in cases where the funds could be used to help another country.
The Palestinian finance ministry, which is part of Abbas’ Fatah party, said it had been in negotiations with the central banking authority and the PA to develop an independent central bank to manage the bank’s operations.
It said it would not be using the money to support other Palestinian financial institutions that are not part of its control over the Palestinian financial sector.
The move came after the Israeli government said it expected to start using Palestinian banks to pay its bills in 2019.
That could lead to a flood of funds for the Palestinian state.
The Palestinians, however, say the PA is not responsible for the bank money.
They say the bank funds are used to pay salaries to employees of Palestinian companies, to pay debts to Palestinians, to support Palestinian businesses, and to fund projects for the benefit of Palestinians.
The Palestinian Finance Minister, Fawzi Barhoum, said that his government was only looking to use these funds to pay off debts to Palestinian companies.
Barhour has not been seen since leaving the country in late August, according to the PA.
The PA said it plans to issue bonds to cover the bank loans, but would need the approval of the central government to do so.
The PA has been asking the international community for money to fund the banks.
In a bid to attract international financial institutions, it is asking the International Monetary Fund to give the Palestinian finance minister more than $1 billion.
The money would help pay off some of the debt owed to Palestinians by Israel.
But it also would be a boost to the Palestinians’ economy, and could help offset the pain from the economic crisis that has gripped the Palestinian Strip since the conflict began in 1967.
The banks are the lifelines for millions of Palestinians, many of whom live in poverty and face a high risk of unemployment.
Palestinians are largely dependent on their banks to provide basic services such as electricity and medical care, and the Palestinian Central Bank is often out of cash.
The banks have been at the heart of a protracted economic crisis in the impoverished West Bank since Israeli forces seized it in 1967 in a move that has not since been recognized internationally.
Palestinian officials say they have been struggling to make ends meet since Israel took over control of the territory in 2007.
The economic meltdown has hurt the Palestinians economically and has hurt their security, leading to increased violence and poverty in the region.