Managing of Treasury in the Banking System within a Multi Currency Economy

14 Pages Posted: 13 Apr 2012

See all articles by Nidal Rashid Sabri

Nidal Rashid Sabri

Birzeit University

Diama Khaled Abu Laban

Birzeit University

Dima Hanyia

Birzeit University - College of Economics

Date Written: April 12, 2012

Abstract

The Palestinian economy has no national currency which led to having three currencies in use for deposits, saving, wealth measurement and trade transactions. Thus leads to make challenges to the management of banking treasury activities and balances of each single currency in the Palestinian economy. Therefore, this research aimed to target this issue, using three research instruments. Three research instruments were used including: Examining the related laws, imposed by the PMA on banks working in Palestinian economy as well as individual banking regulations, structures interviews with banks treasurers, and a relevant questionnaires was directed to a selected samples of treasury staff and employees regarding challenges to the management of banking treasury and closeting of foreign currency positions.

The study found that management of the banks working in the Palestinian economy imposed more strict levels then that imposed by PMA and decreased it to 1% to 3%, of the total owner equity instead of 5%, while others (42%) reduced the maximum permitted surplus of a currency to a value ranged between 200,000 US$ and 500,000 US$. For closing the surplus of currencies, the majority of banks close it in the last hour of working day. The majority of treasuries' staff strongly agreed that there is a need for additional legislation to cover all related transactions to facilitate the work of the treasury. The study recommended to relaxing the maximum ratio of 5% imposed on each single currency to be hold more than blatancies, keeping the 20% level from owner equity to the total of currencies, extending the time of work including Fridays, reducing the restrictions on investments outside Palestine, permitting trading in options and future transactions including duke deposits and margins.

Suggested Citation

Sabri, Nidal Rashid and Abu Laban, Diama Khaled and Hanyia, Dima, Managing of Treasury in the Banking System within a Multi Currency Economy (April 12, 2012). Available at SSRN: https://ssrn.com/abstract=2038703 or http://dx.doi.org/10.2139/ssrn.2038703

Nidal Rashid Sabri (Contact Author)

Birzeit University ( email )

Birzeit, West Bank
Palestine
972 2 2810396 (Phone)
972 2 2982963 (Fax)

HOME PAGE: http://home.birzeit.edu/commerce/sabri

Diama Khaled Abu Laban

Birzeit University ( email )

birzeit
Palestine

Dima Hanyia

Birzeit University - College of Economics ( email )

birzeit
Palestine

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