Bank of Israel rejects Sa’ar’s request to cancel NIS 200 bill as blow against Hamas
Foreign minister argues the move would ‘dramatically harm Hamas’s economic capacity,’ but bank says there’s no ‘well-founded professional justification’ for idea
Lazar Berman is The Times of Israel's diplomatic reporter
The Bank of Israel on Thursday dismissed a public call by Foreign Minister Gideon Sa’ar to take the 200-shekel banknote out of circulation after he claimed that doing so would deal a financial blow to Hamas.
In his initial letter to Bank of Israel Governor Amir Yaron on Thursday, distributed by his office, Sa’ar asserted that such a move “will dramatically harm Hamas’s economic capacity, will create significant difficulties in paying salaries to its operatives, and will harm its ability to recruit additional terrorists to its ranks, its ability to acquire ammunition and logistical supplies, maintain governance functions and buy the loyalty of its supporters.”
Sa’ar said that a volunteer team of experts estimates that 80% of the Hamas treasury — a stockpile of billions of shekels in cash — consists of 200-shekel notes, with which it pays its members and recoups them as “taxes” on merchants.
He added that the bank should at least consider canceling the series of NIS 200 notes that was transferred to Gaza in recent years.
It is “within our power to deliver a strategic economic blow to the murderous terrorist organization Hamas in the Gaza Strip, without resorting to foreign partners,” Sa’ar wrote.
Given demonstrations against Hamas in Gaza and the group’s ongoing financial straits, Sa’ar argued that “such a heavy economic blow could make a substantial contribution to achieving the war’s goals — eliminating Hamas as a military and governmental entity and returning the kidnapped to their homes.”
Responding to his letter, the Bank of Israel, however, quickly clarified that it had no plans to remove the 200-shekel note from circulation nor cancel any series of notes, in an apparent bid to reassure Israelis holding such notes.
“The governor has not yet been presented with a sufficiently well-founded professional justification for canceling any banknote,” the bank said in a statement to The Times of Israel.
“The proposals put forward on the subject by various parties do not meet any professional standard, their feasibility for implementation does not exist, and they were not presented in an orderly manner to the governor and were not coordinated in any way with the Bank of Israel,” the statement added.
“We emphasize that the NIS 200 banknote in circulation, like the other banknotes and coins, continues and will continue to be used as usual,” said the bank.
Following the bank’s rejection, Sa’ar said its refusal to consider his renewed proposal was “regrettable.”
“After the Bank of Israel rejected a previous proposal to completely cancel the use of 200-shekel banknotes,” said Sa’ar, “the bank decided to reject a new and reasoned proposal to cancel the series of 200-shekel banknotes that was introduced into the Gaza Strip. This was done within a few minutes, without discussion and without any real explanation.”
He asserted that the bank is obligated to immediately examine any proposal relevant to the country’s security.
This is the second time in recent months that the government has proposed getting rid of the NIS 200 note, Israel’s largest denomination.
An earlier proposal to cancel the NIS 200 note in order to combat “black money,” money laundering and tax evasion was put forward in September 2024, and also dismissed by the Bank of Israel.
At the time the bank said that there was no “professional justification” for such a plan and that the governor does “not intend to use his authority to work toward canceling any banknote or to change the mix of banknotes in circulation.”
The Times of Israel Community.