Key Takeaways
- Israel's blockade of physical money has created a severe cash shortage in Gaza.
- Existing Israeli shekels in Gaza are deteriorating from overuse, further hindering transactions.
- An informal network facilitates money transfers into Gaza, bypassing official banking and high fees.
- Residents face extreme inflation, scarcity of essentials, and high costs to access physical currency.
Deep Dive
- Before the war, Israeli shekels were the common currency in Gaza, with Israel controlling its flow.
- Israel stopped allowing physical Israeli shekels into Gaza two years ago, creating a critical shortage.
- The cessation of money flow, coupled with non-operating banks and ATMs, complicates daily transactions.
- Residents like Haya rely on mobile banking and bartering due to damaged infrastructure and lack of jobs.
- Physical cash is so scarce that individuals effectively 'buy money with money,' paying up to $118 for 200 shekels (worth $59 USD).
- Cash brokers facilitate exchanges, charging steep fees, sometimes 50%, to convert bank funds into physical currency.
- Haya's family eats only one meal daily, primarily carbohydrates, due to scarce and expensive produce, despite having cash.
- Inflation is severe: tomatoes cost $32 per kilo, cooking oil prices rose 1,200%, and flour increased 5,000%.
- A basic tent, essential for displaced families, costs around 3,000 shekels ($900 USD).
- Humanitarian aid is often stolen and resold, and collecting aid can be dangerous, with many Palestinians reportedly killed.
- Al-Din and Muhammad run 'Impossible Light' to crowdfund and distribute supplies like milk and diapers in Gaza.
- Transferring donations faces significant obstacles due to strict anti-terrorism financing regulations by banks.
- Direct remittances are often frozen or returned by institutions like Bank of America and the Bank of Palestine.
- Banks are hesitant to facilitate transfers, citing terrorism financing concerns.
- Al-Din employs a fee-free money swapping system, trading Euros for shekels held in Palestinian bank accounts by individuals no longer in Gaza.
- This system allows funds to bypass traditional bank fees and direct transfer restrictions, moving money instantaneously.
- He facilitated a transfer of 150 shekels (approximately $45 USD) from Mustafa in Egypt to a relative's Palestinian account.
- The transactions are tracked and specifically designated for essential goods like food and diapers, not illicit purposes.
- Physical Israeli shekels in Gaza are heavily worn from overuse, leading sellers to reject damaged bills, prompting fee-based repair services.
- Muhammad often spends days searching for usable cash from brokers in makeshift markets, where prices fluctuate based on aid availability.
- Diapers cost $75 per pack compared to $6 pre-war, and recipients pay a 40% fee to convert bank transfers into physical cash.
- Markets lack essential items like fruit, vegetables, meat, and cleaning supplies, despite people like Muhammad securing cash.