International Monetary Fund chief Rodrigo Rato said on Thursday it was up to IMF member countries to decide how it should proceed with the Hamas-led Palestinian Authority.
"It will be up to the different governments what is our policy going forward," Rato said in an interview with Reuters. When asked if the IMF could face repercussions for having a relationship with Hamas, Rato said: "No".
The United States and European Union have cut off direct aid to Hamas, which they consider as a terrorist organisation, even though Hamas won parliamentary elections in January.
Since the Palestinian Authority is not a sovereign state, it cannot apply for membership in either the IMF or the World Bank, and is not eligible for loans normally available to member countries.
The World Bank has warned that the Palestinian Authority faces dire economic conditions, and without aid will not be able to pay wages to 140,000 state employees. The fund has provided policy advice and technical assistance to the Palestinian Authority at the request of the international community since the 1993 Oslo Accords.
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