Selection of Saving Currency in the Palestinian Banking System

The Palestinian economy belongs to emerging economies with GDP of 6.5 billion USD. It has unique conditions as a service economy, with a significant role in public sector contribution, including the Palestinian National Authority budget, the UNRWA budget and many NGOs financed by international aids.. Finally, the most unique aspect of this economy, is that it has no national currency, but three official currencies are in use instead, including JD, US$, and NIS. Therefore this research aims to examine how clients move from one currency to another in case of saving, and conducting business transactions. The study used multi research instruments including: analyzing the related data to examine the relationship between changes in the value of banking deposits of each of the used currencies and their respected interest rates, also using quarterly data analysis for the last ten years. In addition, structured interviews and relevant questionnaires were articulated and conducted to selected samples of bankers and banks' clients from 12 banks. The study found that the interest rate is not a critical factor in selecting a currency for savings and deposits in banks, as reported by the clients and banking staff, as well as found by the financial analysis, which shows week or no correlation between changes in interest rates and changes in values of deposits in banks