Gaza is running out of cash

Gaza's ongoing humanitarian crisis has created yet another problem for residents – a desperate shortage of cash.

With the Israeli siege blocking supplies of fresh currency into the territory, Palestinians are having to mend their "tattered bills and rusted coins" to buy essential goods, said the Financial Times.

Gaza's last working ATM closed in late 2024, while most of its banks have either shut due to security fears or been destroyed by Israeli air strikes. Due to the lack of new cash coming into the enclave, much of the remaining currency has ended up in the hands of "powerful wholesalers" trading in goods from Egypt and Israel. They use bank transfers to pay for the imports, but insist buyers pay cash for the goods.

The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Charity workers and aid agencies hit

It has led to a "lucrative" sideline for black market money brokers, who buy cash from the traders and then sell it for "exorbitant" fees to desperate Gazans, receiving payment via electronic bank transfers.

Those charges have increased following Israel's renewed bombardment of Gaza, said the FT. Traders have doubled their asking price from 15% to 30%.

"A customer will transfer me Shk1,000 and only walk away with Shk700 in cash," one told the newspaper. He had bought the currency from a trader higher up the ladder at a 24-25% mark-up.

Known as "exchangers", these men are becoming a way of life in Gaza, said CBC News. One, named Saadi Al-Ashqar, said that cashflow was being controlled by "top businessmen" and that the only way to get money in and out of the enclave was through a digital banking app tied to the Bank of Palestine. "Those who control this situation are unfortunately taking advantage of the situation that we and the citizens are living in," he said.

It is not only Gazans who are being hit; employees at charities and humanitarian agencies are also having to use traders to receive their wages. Locally based workers at the charity War Child are having to transfer their salary to a trader, who then takes a 40% cut before giving them the rest of their wages in cash, according to The New Arab. The charity has started paying them an extra allowance to make up some of the shortfall.

Gaza's cash repair shops

Traders' charges can also vary depending on the quality of the banknote being used. The lack of fresh currency means existing notes are suffering from "wear and tear". Fresher-looking notes merit a higher fee as they are more likely to be accepted by vendors, most of whom refuse to accept worn out bank notes.

Several Gazans have turned the situation to their advantage, restoring old, ripped notes for a price. Former jeweller Mohammad Al-Ashqar repairs around 200 a day, said the Los Angeles Times, carefully taking off any old tape holding the note together, removing the residue and then applying transparent glue so the note doesn't break when folded.

"People have been passing around the same bills for more than a year now," said Al-Ashqar. "Of course they’re tattered and fragile."

It's turned into such a success that he has trained his three former jewellery assistants to repair notes, charging two to three shekels – "the equivalent of 55-82 cents" – per repair, depending on the quality of the note.

"A lot of people come back to thank me because I helped them fix their banknotes," he said.

Not everyone can repair or replace their cash, however, including some of the exchangers themselves. Money broker Abdallah Al-Mzeiny has found himself a victim of vendors' refusal to accept 10-shekel coins for fear they are counterfeit. He has more than 10,000 shekels, some $2,700, in the coins.

Nevertheless, he will continue his trading. "It’s a way for anyone with cash to earn money," he said.