Mahmoud Abbas
Mahmoud Abbas Reuters

The Palestinian Authority (PA) is mulling the possibility of introducing its own currency, but the issue remains open, the PA envoy to Russia said on Wednesday, according to the Sputnik news agency.

"We currently have three currencies circulating — the American dollar, the Israeli shekel and the Jordanian dinar. Our central bank is now studying this issue [introducing its own currency]," the envoy, Abdel Hafiz Nofal, was quoted as having said.

Nofal stressed that "there are certain difficulties," adding that this question remains open. He also noted that the issue of usefulness of the new currency and the moment it can happen are still to be determined.

The Palestine Monetary Authority (PMA) plays the role of a central bank in the PA and is responsible for monetary and banking policy, noted Sputnik.

The Paris Protocol agreement 1994 rules that the PMA, despite having the functions of a central bank, cannot issue currency. According to the document, the use of the Israeli shekel was recommended and Israel was granted a veto right over a Palestinian currency.

Nofal's comments come days after the Palestine Liberation Organization's (PLO) top leadership ordered preparations for disengagement from Israel.

The Executive Committee, led by PA chairman Mahmoud Abbas, ordered the preparation of "plans and projects for disengagement steps with the Israeli government at the political, administrative, economic and security levels."

In the past, Abbas planned to issue passports which bear the inscription “State of Palestine” instead of “the Palestinian Authority”.

The PA has been making plans to issue passports for the “State of Palestine” since 2012, when the United Nations overwhelmingly voted in favor of upgrading the PA's status at the organization to that of a "non-member observer state".

At the time, Abbas issued guidelines ordering the PA government to re-issue passports, identity cards, registration documents, vehicle licenses, driver's licenses, stamps and postmarks with the name “State of Palestine” instead of Palestinian Authority.

But he later backed off from the plan, with his associates claiming Abbas feared that Israel would not recognize the new passports and not allow Palestinian Arabs to enter Israel through Israeli crossings.

The PA again announced plans to issue “Palestine” passports in 2016, but to date, nothing has come of that announcement.