Full Analysis Summary
Cash shortage in Gaza
In Gaza City's Remal neighbourhood, residents said a shortage of usable Israeli shekel banknotes has upended daily life.
Samar Abu Harbied, 45, said she had not touched a paper note for months and now asks grocers to put purchases on credit until her husband or son can wire money.
Najlaa Sukkar, 48, said a pharmacist refused a worn 20-shekel bill and she could not pay the 30-shekel check-up fee, forcing her to return without medical care.
The article says Palestinians use the Israeli shekel and depend on Israel to supply banks with new banknotes and coins.
It says Israel imposed a severe cash flow problem immediately after it embarked on its genocidal war on Gaza in October 2023, and a US-brokered ceasefire that went into effect in October brought little reprieve.
People were left to rely on worn currency or new electronic payment systems amid limited internet coverage.
Mobile payments amid cash crisis
The Palestinian Monetary Authority, working with internet service providers, has pushed mobile-based electronic payments such as PalPay and Jawwal Pay to overcome a severe shortage of physical cash after the destruction of an estimated 90 percent of bank branches and cash machines.
Some residents, like Abu Harbied's son Shady, switched to bank-transferred wages and bank apps.
Many Palestinians still do not receive salaries by bank transfer, lack access to smartphones, cannot keep phones charged due to an electricity crisis, or cannot find a good internet connection.
Vendors and customers reported fears when bank applications stopped; Abdallah Sukkar said, "Yesterday, when the bank application stopped, we were terrified that we might lose our money in the bank."
Gaza cash crisis
Analysts and shop owners described the crisis evolving from liquidity problems into a structural collapse of the formal monetary system.
Ahmed Abu Qamar, a member of the board of directors of the Palestinian Economists Association, said a black market now dominates cash circulation, a small group of traders manages cash through high-commission cashing operations, and cash has become a traded commodity, signalling severe distortion and neutralisation of the formal banking system.
He warned that an abrupt transition to traceable electronic payments can produce severe social distortions and fragmentation.
He said approximately 95 percent of households in Gaza depend on aid.
Residents reported profiteering, with brokers charging commissions up to 50 percent and debts rising by more than 500 percent during the war.
Vendors’ profits barely reached 2 percent.
Shopkeepers, like Abdallah Sukkar, gave out large amounts of goods on credit and Sukkar estimates he extended about 20,000 shekels to customers who have little ability to pay.