Inside Gaza’s world of ‘cash brokers’ as currency disappears: ‘We lose nearly half of our money just to be able to spend it’

Finance·Middle EastInside Gaza’s world of ‘cash brokers’ as currency disappears: ‘We lose nearly half of our money just to be able to spend it’BY Wafaa ShurafaBY Samya KullabBY The Associated PressBY Wafaa ShurafaBY Samya KullabSEE MORE How much cash is still in Gaza

Jehad Alshrafi—AP PhotoCash is the lifeblood of the Gaza Strip’s shattered economy, and all other necessities in this war-torn territory — food, fuel, medicine — it is in extremely short supply

With nearly every bank branch and ATM inoperable, people have become reliant on an unrestrained network of powerful cash brokers to get money for daily expenses — and commissions on those transactions have soared to 40%. “The people are crying blood because of this,” said Ayman al-Dahdouh, a school director living in Gaza City. “It’s suffocating us, starving us. ” At a time of surging inflation, high unemployment and dwindling savings, the scarcity of cash has magnified the financial squeeze on families — some of whom have begun to sell their possessions to buy essential goods

The cash that is available has even lost some of its luster

Palestinians use the Israeli currency, the shekel, for most transactions

Yet with Israel no longer resupplying the territory with newly ed bank notes, merchants are increasingly reluctant to accept frayed bills

Gaza’s punishing cash crunch has several root causes, experts say

To curtail Hamas’ ability to purchase weapons and pay its fighters, Israel stopped allowing cash to enter Gaza at the start of the war

Around the same time, many wealthy families in Gaza withdrew their money from banks and then fled the territory

And rising fears Gaza’s financial system mpted foreign es selling goods into the territory to demand cash payments

Someone needing cash transfers money electronically to a broker and moments later is handed a fraction of that amount in bills

Many brokers openly advertise their services, while others are more secretive

Some grocers and retailers have also begun exchanging cash for their customers. “If I need $60, I need to transfer $100,” said Mohammed Basheer al-Farra, who s in southern Gaza after being displaced from Khan Younis. “This is the only way we can buy essentials, flour and sugar

We lose nearly half of our money just to be able to spend it. ” In 2024, inflation in Gaza surged by 230%, according to the World Bank

It dropped slightly during the ceasefire that began in January, only to shoot up again after Israel backed out of the truce in March

Cash touches every aspect of life in Gaza 80% of people in Gaza were unemployed at the end of 2024, according to the World Bank, and the figure is ly higher now

Those with jobs are mostly paid by direct deposits into their bank accounts

But “when you want to buy vegetables, food, water, medication — if you want to take transportation, or you need a blanket, or anything — you must use cash,” al-Dahdouh said

Shahid Ajjour’s family has been living off of savings for two years after the pharmacy and another they owned were ruined by the war. “We had to sell everything just to get cash,” said Ajjour, who sold her gold to buy flour and canned beans

Sugar is very expensive, costing the equivalent of $80-$100 per kilogram (2. 2 pounds), multiple people said; before the war, that cost less than $2

Bills are worn and unusable The bills in Gaza are tattered after 21 months of war

Money is so fragile, it feels as if it is going to melt in your hands, said Mohammed al-Awini, who s in a tent camp in southern Gaza

Small owners said they were under pressure to ask customers for undamaged cash because their suppliers demand pristine bills from them

Thaeir Suhwayl, a flour merchant in Deir al-Balah, said his suppliers recently demanded he pay them only with brand new 200-shekel ($60) bank notes, which he said are rare

But when she tried to buy some household supplies from a merchant, she was turned away because the bills weren’t in good condition. “So the worth of your $50 is zero in the end,” she said

This blem has given rise to a new in Gaza: money repair

But even cash repaired with tape or other means is sometimes rejected

People are at the mercy of cash brokers After most of the banks closed in the early days of the war, those with large reserves of cash suddenly had immense power. “People are at their mercy,” said Mahmoud Aqel, who has been displaced from his in southern Gaza. “No one can stop them. ” The war makes it impossible to regulate market prices and exchange rates, said Dalia Alazzeh, an expert in finance and accounting at the University of the West of Scotland. “Nobody can physically monitor what’s happening,” Alazzeh said

A year ago, the Palestine Monetary Authority, the equivalent of a central bank for Gaza and the West Bank, sought to ease the crisis by introducing a digital payment system known as Iburaq

It attracted half a million users, or a quarter of the population, according to the World Bank, but was ultimately undermined by merchants insisting on cash

Israel sought to ramp up financial pressure on Hamas earlier this year by tightening the distribution of humanitarian aid, which it said was routinely siphoned off by militants and then resold

Experts said it is un if the cash brokers’ activities benefit Hamas, as some Israeli analysts claim

The war has made it more difficult to determine who is behind all s of economic activity in the territory, said Omar Shabaan, director of Palthink for Strategic Studies, a Gaza-based think tank. “It’s a dark place now

You don’t know who is bringing cigarettes into Gaza,” he said, giving just one example. “It’s a mafia. ” These same deep-pocketed traders are ly the ones running cash brokerages, and selling basic foodstuffs, he said. “They benefit by imposing these commissions,” he said

Once families run out of cash, they are forced to turn to humanitarian aid

Al-Farra said that is what mpted him to begin seeking food at an aid distribution center, where it is common for Palestinians to jostle over one other for sacks of flour and boxes of pasta. “This is the only way I can my family,” he said. ___ Kullab reported from Jerusalem

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