If your economy consists of foreign aid, you don't get a currency.
To have your own currency, you need to have your own economy. If your economy consists of foreign aid and your biggest employers are your own government (subsidized by foreign aid) and an UN agency (subsidized by foreign money), then you don't have any basis for a currency.
It doesn't help that there has never been any Palestinian Muslim political entity before. And so no actual currency. Unless they make one up...
In markets across historic Palestine, tourists can buy old coins and bills emblazoned with the phrase "Palestine pound." The bills often catch visitors off guard, a stark reminder of a world that existed prior to the partitioning of the Palestinian homeland in 1948.
Indeed, the Palestine pound gives lie to the oft-repeated Zionist mantra that Palestine was a "land without a people for a people without a land" as it demonstrates the existence of a shared currency used throughout the British Mandate of Palestine for nearly 30 years by Muslims, Christians, and Jews alike.
Speaking of Zionist mantras, the Palestine Pound was issued by the Jewish Agency's Anglo-Palestine Bank. The Anglo-Palestine Bank became the Israeli Bank Leumi. The Anglo-Palestine Company proposed issuing notes in 1917 and had some of its currency in circulation, though it wasn't recognized at the time. The British agreed in 1927 and set up a Palestine Currency Board.
The Currency Board became irrelevant after the declaration of Statehood, but still managed to transfer currency reserves to London and attempted to intervene in the setting up of the Israeli Shekel. It was finally dismantled in 1952. Considering its artificial valuation set at one British Pound; it never made that much sense.
So the only currency with Palestine on it only existed because of the Jews.
"Palestinians have to have three accounts in three different currencies in the bank," because many are paid in dinars or dollars but have to pay for their daily expenses in shekels. Others are paid in shekels, but have to pay university tuition or other institutional costs in dinars, he explained.
"Households and even investors will have to exchange one currency to another at a certain point, and because there is a difference between the bid and ask prices of each currency, people are forced to lose money in every transaction they make."
As a result, Palestinians are constantly subject to multiple exchange rate volatilities, as fluctuations in the rate of exchange between any currency can dramatically affect their financial stability.
That's what happens when you don't have an economy. And you can't have currency without an economy. When your economy consists of money that other people give you, then you're going to have all sorts of problems with exchange rates.