EBRD to help boost financial stability in West Bank and Gaza

By Nibal Zgheib

EBRD to help boost financial stability in West Bank and Gaza

Financial stability in West Bank and Gaza will increase thanks to an EBRD project

• EBRD technical assistance to help increase capacity of Palestine Monetary Authority

• Project to support stability of Palestinian financial system and help create resilient economic growth

The European Bank for Reconstruction and Development (EBRD) is launching its first technical cooperation project in the West Bank and Gaza to support the resilience of the Palestinian financial system and reinforce its ability to finance the local economy.

The project will strengthen the capacity of the Palestine Monetary Authority (PMA) to manage its balance sheet and the financial risks inherent in its activities.

The signing ceremony took place at the EBRD Annual Meeting in Jordan in the presence of the PMA’s Governor His Excellency Azzam Shawwa, and EBRD Vice President, Policy and Partnerships, Pierre Heilbronn, EBRD Managing Director for the Southern and Eastern Mediterranean Region Janet Heckman and Director for the Eastern Mediterranean Region Heike Harmgart.

The PMA is responsible for monetary and banking policies targeting price stability and low inflation, fostering financial stability and safeguarding the Palestinian banking sector. It is set to become a fully fledged central bank and has been building up its capacities in several areas, including banking-sector supervision and regulation, credit scoring, payment systems and legal frameworks.

The PMA manages and provides liquidity in euros, Jordanian dinars, Israeli shekels and US dollars – the four official currencies circulating in the West Bank and Gaza. This complex framework requires PMA to further develop its know-how and skillsets.

The EBRD project will increase PMA’s capacity to manage its assets and liabilities, including reserve management from the perspective of financial risk management. It will help introduce best practices in balance sheet management. This project is part of the EBRD’s Local Currency and Capital Markets Development Initiative.

In March 2018, the EBRD launched its first investment in the West Bank and Gaza to increase access to finance for micro, small and medium-sized enterprises (MSMEs).

Operating from the EBRD’s office in Amman, the Bank will provide support for private sector competitiveness and innovation in the West Bank and Gaza, increasing MSMEs’ access to finance, fostering a sustainable supply of energy and promoting private sector participation in energy efficiency and infrastructure.