From vault to payment
Shekels accumulating in Palestinian bank vaults pass through two Israeli banks before they can support import payments. Governor Yahya Shunnar puts accumulated cash at 18 billion shekels by mid-2026. Israel Discount Bank and Bank Hapoalim are the two correspondents in this cross-border channel. The dependence between cash held locally and access to payment settlement identifies where liquidity is constrained.[1]
The annual transfer ceiling has been 18 billion shekels for approximately six years, allocated in quarterly quotas of 4.5 billion shekels. Shunnar says last month’s advance use of the fourth-quarter quota is now fully drawn. That arrangement relieved accumulated cash. Shunnar gives 2027 as the date for the subsequent shipment. The cost of the relief is losing the ability to use that quota again for the remainder of the year. Continued cash inflows imply further accumulation under this timetable; no bank-specific payment shortfall has been disclosed.[1]
A connection on short terms
Fragility joins two constraints: the channel for moving physical cash is limited, and the legal assurances supporting it can receive short extensions. Shunnar says the correspondent relationship currently runs through the end of 2026. Shorter foreign-exchange and swap tenors from international banks also complicate liquidity management. Shorter maturities make banks more dependent on frequent funding renewal. A scenario in which that dependence impairs import payments requires correspondent transaction capacity to contract. Current transaction continuity, as reported by Shunnar, preserves that link in the chain.[1]
The same interview identifies the buffer currently interrupting the failure chain: correspondent links have not actually been severed, and no customer transaction delays or rejections have been reported. Indemnities from Israel’s finance ministry support the two banks’ continued participation. Advancing the quota also provided temporary relief. These protections are functioning, although they cannot substitute for the next extension. Shunnar’s discussions with international banks have yet to replace the shekel channel.[1]
The functioning buffer
Resilience is measured by the two banks keeping the payment channel open alongside the amount of accumulated cash. Shunnar’s year-end correspondent term sits beside his shipment date of 2027. Longer correspondent assurances and swap maturities reduce renewal dependence; a first customer delay would show the constraint travelling from bank vaults into trade. The concrete resilience threshold is the preservation of current transaction continuity.[1]