A ceasefire between Hamas and Israel took effect on Sunday 19 January to end the deadliest war in the Gaza Strip’s history, after months of failed negotiations. Israel’s genocide placed a further toll on Palestinians’ everyday lives, which was already difficult with the occupation’s ongoing blockades and attacks.
The growing humanitarian crisis in Gaza has been further compounded by a crisis of cash. All banks across the besieged Strip officially halted their operations in August last year, and the few ATMs once reported to still be operational are said to be too unsafe for civilians to access.
Civilians and NGOs spoke to The New Arab, detailing extortionate fees being charged by individuals identified as ‘cash traders’ or ‘merchants’ in Gaza.
“Due to security risks, banks can no longer operate even at minimum levels,” said Jonathan Crickx, the communications chief for UNICEF Palestine.
In July 2024, the Norwegian Refugee Council (NRC) warned of the cash liquidity crisis in Gaza and reported that “exorbitant” rates were being charged to access cash, along with exploitative practices such as having to use one’s identification card as collateral for cash.
Since then, the situation has “worsened significantly” according to Francesca Lai, the organisation’s cash programme development manager.
Francesca confirmed to The New Arab that no banknotes are entering the Strip and that it has become too dangerous to refill ATMs with banknotes.
“The available cash liquidity is coming through informal channels (likely smuggling), or the circulation of old bank notes,” explained Francesca, who added that fees to withdraw cash from money exchanges can now be as high as 40 percent.
Kieran King, the head of humanitarian at War Child, identified cash as one of the three critical issues in the besieged Strip alongside lack of access to food and fuel.
“Anything that we need to pay cash for on the ground, it’s 40 percent more expensive than it would be otherwise”
“Everyone complains about it … it’s a very current topic of conversations,” he said, speaking to The New Arab from a deployment to Gaza in December.
For War Child’s locally based employees to be able to access their salaries in cash, they must transfer the funds to the bank account of a ‘trader’ who takes a 40 percent cut before giving them the remainder of their salary in cash. To compensate for some of that loss, the organisation has started providing an additional allowance.
“They’ve had a 40 percent pay cut,” explained Kieran, adding that the organisation also faces operational difficulties due to the liquidity crisis.
“Anything that we need to pay cash for on the ground, it’s 40 percent more expensive than it would be otherwise … it’s not just the cost of goods, it’s the cost of getting the cash with which to buy the goods.”
According to Kieran, the price of a single egg was approximately $6 (USD) in December, and a kilogramme of sugar went for about $100.
Civilians report high fees charged to access cash
“It’s crucial to have cash in Gaza right now,” said Mohamed Hatem, citing the lack of digital payment methods and the high price of essential goods.
Also known as the Gym Rat in Gaza on Instagram, Mohamed is a young man who posts daily videos of himself bodybuilding and “conquering fitness in a warzone.” He has received donations from his followers but says they are currently of little use due to the liquidity crisis.
“I haven’t received any of the donations I got from my fundraiser,” he told The New Arab, adding that there have been times when he has considered withdrawing some funds, but is “reluctant” due to the high commission fees being charged.
According to Mohamed, the fees are currently somewhere between 25 and 30 percent of the funds being withdrawn.
“The commissions take a huge bite out of the donations we receive”
Saeed Al-Err runs Sulala, Gaza’s only animal rescue, and faces the same challenges when withdrawing funds donated by animal lovers around the world who want to support his work tending to animals affected by Israel’s war on Gaza – among them a donkey hit by a drone strike and cats wounded by shrapnel.
For every $1,000 he withdraws, an individual described as a ‘merchant’ takes a $200 cut.
“The commissions take a huge bite out of the donations we receive,” explained Annelies Keuleers, a spokesperson for the rescue.
Some employees in Gaza’s private and public sectors continue to have a portion of their salary sent to their bank accounts each month. But the funds remain of little use if they are not converted to cash.
Mahmoud Ellouh, an employee of the Islamic University in Gaza, has a percentage of his salary wired to him each month. To access it in cash to buy food and other essential goods for his family, he must wire it to a currency trader who charges a fee of around 25 to 27 percent of the amount being withdrawn.
the banking infrastructure in the Gaza Strip [Getty]
Mahmoud told The New Arab that he does not have sufficient cash due to these fees and has been forced to rely on aid as a result.
Before the war, Gazans who spoke to The New Arab said the ordinary fee for a cash withdrawal was somewhere between two and four percent.
“It’s just crazy that we have to lose one-third of the money we’re trying to withdraw to get it in cash,” said Mohamed.
The fees charged to access cash can also reportedly vary according to the quality of the banknotes being traded. With no new bills reportedly entering the Strip, old bills in continuous circulation can suffer from wear and tear.
Hazem Al-Naizi, the director of an orphanage primarily looking after children with disabilities told The New Arab that higher fees can be charged in exchange for better, less-worn banknotes.
Hazem, displaced from Gaza City to Al-Mawasi, also regularly pays a fee of around 30 percent to access cash to buy necessities for the children in his care. He says people who sell goods in the humanitarian zone’s marketplace are the same ones facilitating the exchange of cash.
“The financial situation in Gaza is very, very tough; every day that passes, the challenges in all aspects of life increase,” he said.
‘On the verge of collapse’
As an interim solution, international NGOs like the NRC and UNICEF are working with vetted agents to distribute cash to vulnerable populations.
But even accessing these agents can be a safety concern, according to the NRC, and families often still pay high fees to withdraw funds.
A scheme started by UNICEF allows families considered “vulnerable” – including female-headed households and families with pregnant women or children with disabilities – to participate in a cash transfer programme that has reached almost every third person in Gaza as of November 2024.
Eligible recipients activate an e-wallet by visiting a vendor or through an app, which allows them to receive cash from vetted agents or to purchase goods and services by making an electronic transfer to other e-wallet owners.
Facilitating transfers like these can be a solution for the time being, but ultimately they are only stopgaps in an ever-deteriorating situation.
Francesca Lai, from the NRC, told The New Arab that Gaza’s banking system is ultimately “on the verge of collapse.” She cautioned that without the start of a recovery process, the financial sector and economy will collapse completely.
The impending Israeli ban on the UN relief agency for Palestinian refugees (UNRWA) set to take effect at the end of January only stands to make matters worse if the agency’s Gaza operations are shut down, warned War Child’s head of humanitarian.
“The humanitarian system is just on its knees,” Kieran explained. “It’s hard to imagine being here and how things would get worse, but they will. And we’re very worried about that.”
Rosa Rahimi is a journalist and researcher based in London where she works on conflict, human rights, and culture
