Residents of the Gaza Strip are suffering from a crippling economic crisis exacerbated by a severe shortage of small currency notes, which has greatly impacted their ability to conduct daily commercial transactions. This shortage has led to rising prices and sellers refusing to complete sales without appropriate change, forcing residents to accept unwanted goods as substitutes.
In the Nuseirat market in central Gaza, Fadel Bashiti struggles to buy bread despite having money in his pocket. He says, "I need 3 shekels, but I can't break the large bill I have." This situation is not unique; it reflects a reality faced by many residents of Gaza who find themselves in a daily struggle to obtain suitable change.
Details of the Situation
Complaints from Gaza residents are increasing regarding the difficulty of obtaining basic goods due to the shortage of small currency notes. Rashida Tawfiq states, "Buying daily necessities has become a nightmare, as sellers refuse to accept old or damaged bills." This situation has led many to leave markets without purchasing what they need or to accept items they do not want to avoid losing money.
Salma Ziad, from Deir al-Balah, mentions that she no longer leaves her home without carrying small currency notes. "If I don't have change, how can I get around?" she adds. The crisis extends beyond mere purchasing; it affects her ability to work and move around.
Background & Context
Historically, the Gaza Strip has witnessed recurring economic crises due to the ongoing blockade and multiple conflicts. Since the onset of the war between Israel and Hamas on October 7, 2023, the economic crisis has significantly worsened. Data indicates that over 60% of transportation means have been destroyed, impacting transportation infrastructure and the prices of imported fuel.
The Israeli shekel is the primary currency circulating in Gaza, as the value of the dollar and dinar has declined. Data from the Bank of Israel shows that the blue 200 shekel note, equivalent to about 55 euros, has become the dominant currency in transactions, reflecting the deterioration of cash liquidity in the sector.
Impact & Consequences
Estimates show that cash liquidity in Gaza has decreased by more than 45% since the beginning of the war, leading to a withdrawal of cash from circulation. Economic expert Mohamed Barbach noted that approximately 1.2 billion shekels are missing from the banking system in Gaza, as most bank branches remain closed.
This situation drives trade into unregulated channels, increasing inflation rates. As reliance on banking applications and digital wallets grows, access to these services remains limited, as many residents lack mobile phones or internet connectivity.
Regional Significance
The Gaza crisis exemplifies the economic challenges faced by many Arab countries amid ongoing conflicts. The deterioration of the economic situation in Gaza could impact regional stability and exacerbate humanitarian crises in the area.
In conclusion, the shortage of small currency notes in Gaza reflects a complex reality that requires urgent intervention from the international community to help residents overcome this ordeal. The continuation of the current situation may lead to worsening humanitarian and economic crises in the sector.