The Palestinian pound in Cyprus in 1942: The story of a currency that crossed the sea

 In 1942, during World War II, Cyprus experienced a unique monetary event: the adoption of the Palestinian pound as temporary legal tender. This decision stemmed from a cash liquidity crisis on the island, prompting the British authorities to take the unusual step of extending the use of another colony's currency.

Historical background

 The Palestinian pound was the official currency of Mandatory Palestine from 1927. Issued by the Palestine Currency Board, it circulated unofficially in Palestine, Transjordan, and some neighboring areas. The currency featured trilingual inscriptions (Arabic, English, and Hebrew) and designs inspired by Palestinian landmarks such as the Dome of the Rock and Al-Aqsa Mosque.

The monetary crisis in Cyprus

By 1942, Cyprus was under British rule and played a strategic role as an important military and administrative location in World War II. However, the war affected the island's economic activity, leading to a severe shortage of banknotes, especially the larger denominations (1 and 5 pounds).
The local bank in Cyprus was unable to print more banknotes easily due to wartime restrictions, and shipments of cash from Britain were delayed.

Palestinian pound in Cyprus

On May 5, 1942, the British authorities in Cyprus issued a law stating the following:

“The Palestinian pound, in denominations of 1 and 5 pounds, was adopted as legal tender in the island until November 17, 1942.”

The Palestinian pound has been approved for use in daily transactions, including buying, selling, paying salaries and taxes.

The banknotes were distributed to Cypriot banks, including the Bank of Cyprus and Barclays Bank, and circulated for a period of approximately 6 months, after which they were gradually withdrawn following the expiration of the legal deadline. 

A decree was issued on September 17, 1942, allowing Palestinian coins to be traded until November 17, 1942, and prohibiting their use starting from November 18, 1942.

All the banknotes mentioned above shall be presented for exchange to a branch of the Ottoman Bank or to the office of the Commissioner of Kyrenia District, on or before the seventeenth day of November 1942.

Economic and cultural repercussions

The use of the Palestinian pound in Cyprus strengthened economic ties between the two regions and provided Cypriots with an opportunity to become familiar with a currency bearing different symbols and designs. Although this use was temporary, it left a mark on the island's monetary history.

The story of the circulation of the Palestinian pound in Cyprus in 1942 is an example of how colonial regimes reacted to economic challenges during times of crisis. This incident is one of the rare cases that It uses the currency of a colony within another colony in the British Empire..

Resources

• CyLaw: Official declaration regarding the use of the Palestinian pound in Cyprus (May 5, 1942) 

• “"Palestinian Pound", Wikipedia .en.wikipedia.org

• “"History of currencies in the Middle East", Wikipedia .

• “A look at the currencies of Palestine under the British Mandate“Online Coin Club .

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