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Gaza's cash crisis fuels banknote repair trade amid economic collapse
In the war-torn streets of Gaza City, Baraa Abu al-Aoun meticulously restores a frayed 100-shekel note ($30.50) with pencils and glue-a makeshift solution to a crisis where every banknote counts. Once a university student, he now relies on this roadside trade to survive, as Israel's blockade and the destruction of banks have left Gaza's economy in tatters.
The roots of the cash shortage
Since Hamas's October 2023 attack on Israel and the ensuing war, Israel has halted cash transfers into Gaza, citing concerns over Hamas's reliance on physical currency for military operations. The offensive devastated banking infrastructure: most branches were bombed or looted, with the Palestine Monetary Authority estimating $180 million (£136m) stolen from vaults. Seven weeks into a fragile ceasefire, banks remain crippled-ATMs are nonfunctional, and reopened branches offer only account reactivation or digital services.
Without cash, Gazans face exorbitant fees-up to 50%-to convert digital transfers into physical money through informal merchants. Zakaria Ajour, a market vendor, notes that even slightly damaged notes are now rejected: "Scratches or tape make them worthless." The scarcity has inflated prices for basic goods, with reports of 2kg of tomatoes costing $80 and 5kg of onions $70.
Digital workarounds and persistent struggles
Electronic transactions via bank apps and e-wallets have surged as stopgaps. The Bank of Palestine reports over 500,000 e-wallet users, while Unicef and the World Food Programme distribute aid digitally to 1 million Gazans-prioritizing children, amputees, and pregnant women. Jonathan Crickx of Unicef confirms 99% of recipients spend funds on food, water, and hygiene, but inflation still prices essentials out of reach.
Hanan Abu Jahel, displaced in central Gaza, used a 1,200-shekel ($367) Unicef transfer to buy rice and lentils-yet her family of 12 lacks vegetables, meat, or eggs. "My youngest begs for eggs," she says, "but prices are impossible."
"It's pure suffering. No income, no cash flow-just survival."
Numan Rayhan, displaced from Jabalia
Banks reopen, but chaos reigns
Long queues snake outside the Bank of Palestine in Gaza City, one of nine reopened branches. Asmaa al-Ladaa arrived at 06:00 to open an account for overseas remittances: "We left our children in a tent-this is our only hope." In Khan Younis, where banks remain rubble, Abu Khalil spent a day traveling to central Gaza, only to be turned away. The 61-year-old's Palestinian Authority salary is halved by merchant fees: "There's no choice. You pay or starve."
An anonymous money trader admits commissions fluctuate with aid flows: "When crossings open, rates drop to 20%. When they close, we charge 50%."
UN warns of unprecedented collapse
A UN report labels Gaza's economic freefall the worst on record: 100% of its 2.1 million residents now live in poverty, with 80% unemployed. The Palestine Monetary Authority's new payment system enables offline transactions via text, but inflation erodes relief efforts. Meanwhile, Trump's 2025 peace plan promises "economic miracles" for Gaza-yet offers no concrete path to recovery.
'We're not human anymore'
Back at his table, Baraa holds up a restored note, his sign advertising "high professionalism, no tape." His dream-a degree, a stable job-feels distant. "I just want this war to end," he says. "In Gaza, we're not living. We're just surviving."
