The entry of funds from outside the Gaza Strip has stopped since the beginning of the crisis, exacerbating the severity of the liquidity shortage (Al Jazeera)

Gaza -

When the young man, Mahmoud Sheikh Ali, received a letter from the Catholic Relief Services Foundation informing him that he had received financial assistance, amounting to 750 shekels ($208), he felt overjoyed, given the difficult circumstances he has been suffering from as a result of the war that Israel has been waging on the Gaza Strip, since the 7th of Last October.

However, about a month ago, he was unable to obtain the amount due to the scarcity of liquidity in the Gaza Strip.

Sheikh Ali told Al Jazeera Net that he visits, almost daily, offices that work in the field of mediation in paying money, but they apologize to him because they do not have cash.

Sheikh Ali does not have a bank account, and to receive financial aid he relies on a series of offices and stores approved by banks and relief institutions, which pay money to citizens through a special “code” that the donor institution sends to the beneficiary.

The closure of banks since the beginning of the war has increased citizens' dependence on approved offices to disburse money.

Some ATMs affiliated with some banks operate partially in the areas of the Central Governorate and the city of Rafah (south), but they suffer from severe crowding, in addition to setting a maximum exchange rate limit, which makes the process of withdrawing money from them extremely difficult.

Sheikh Ali says that some stores are trying to exploit the suffering of citizens, and agree to pay the amounts in exchange for a high commission, amounting to about 10%, which he strongly rejects.

Approved stores received a commission that did not exceed 2% of the value of the amount, but some stores took advantage of the scarcity of liquidity and the need of citizens and merchants for it, and raised the commission rate.

Sheikh Ali adds, "If this situation continues, people will not have anything to eat."

a dangerous problem

Omar Al-Riyati - the owner of the Hala Phone exhibition, who works as an intermediary to pay money to citizens - confirms what Sheikh Ali mentioned.

While pointing to several signs that he hung on the doors of his store that read, “There is no liquidity,” he told Al Jazeera Net, “About 1,500 people come to me every day asking about the availability of liquidity, and begging us to pay them any amount of their dues, even if it is 100 shekels or even 50.” .

Al-Riati said that before the current crisis, stores were obtaining cash from banks, which now refuse to give them it, claiming that it is “unavailable.”

He said that the Bank of Palestine "informed them that it has liquidity in its branches in Gaza and the north, and that it needs Israeli coordination and approval in order to bring it, but there is information that the liquidity was stolen, so the shekel must enter from outside the Gaza Strip."

On February 11, the Israeli newspaper Maariv said that an Israeli force seized 200 million shekels ($54.3 million) a week ago (from the date of publication of the news) after storming the Bank of Palestine in Gaza City.

It quoted an Israeli army spokesman as saying, “A week ago, Israeli forces worked at the Bank of Palestine in Gaza to prevent money from reaching Hamas,” and that this step “was based on the decision of the political level, and keeping the money and the party to which it will be transferred are subject to its decision.”

Difficult conditions are being experienced by the residents of the Gaza Strip due to the Israeli war (Anatolia)

Al-Riyati explained that he personally - as a dealer specializing in mobile phones - is suffering from this crisis, adding, "I do not have liquidity; today a wholesaler came to me and I could not buy from him because I did not have liquidity, because he stipulated that he receive his money in cash, and refused to transfer it through the bank."

Al-Riyati warns that the continued problem of liquidity scarcity is very dangerous, and will cause increased suffering for citizens and threaten their food and personal security.

He appealed to officials and the international community to take action to alleviate the crisis before it worsens.

Al Jazeera Net was not able to obtain a comment on the crisis, from the Palestinian Monetary Authority (which acts as the central bank) or from the Palestinian banks.

Citizen Mahmoud Sheikh Ali received financial assistance, but he has been unable to receive it for a month (Al Jazeera)

A tragedy for the downtrodden groups

In the same context, Hassan Matar, owner of the Al-Sham Telecom Store and working in the field of financial intermediation, warns of the repercussions of the continued scarcity of liquidity, especially for weak and marginalized groups.

Matar told Al Jazeera Net that before the crisis, he used to pay the dues of the beneficiaries of the financial aid paid by relief institutions, such as the United Nations Relief and Works Agency for Palestine Refugees (UNRWA), the United Nations Children’s Fund (UNICEF), Catholic Relief Services, the Norwegian Aid Foundation, and the beneficiaries of the Ministry of Social Development. , orphan associations, and beneficiaries of the temporary and daily work system.

He added, "Now, we are unable to pay them, because we need cash, and the banks no longer give it to us."

He added, "These are oppressed and vulnerable groups. They come to me and beg for us to give them any amount of money. One of them says: Give me even 20 shekels. I want to buy medicine for my daughter, food for my family. I am traveling and I need cash... It is a tragedy."

Repercussions

As for the editor-in-chief of Al-Eqtisadiah newspaper, Muhammad Abu Jiyab, from Gaza, he attributes the crisis to the disruption of the economic cycle and the cessation of the banking and commercial system.

Abu Jayab adds to Al Jazeera Net, "In addition to the impact of the war, there are large withdrawals from citizens and merchants from banks, and the inability of the banking system to open its branches in the Gaza Strip. Therefore, the financial cycle is incomplete. There are large withdrawals without sufficient deposits."

Omar Al Riyati: The repercussions of the scarcity of liquidity are very serious (Al Jazeera)

He continues, "The commercial sector is idle and not working, and the economic cycle takes place among the citizens themselves, without this money reaching the banking sector, as in the normal situation."

He also explained that the significant rise in prices leads to “rapid erosion of cash liquidity and erosion of the value of this money.”

He also stated that the cessation of the entry of funds from outside the sector, since the beginning of the crisis, exacerbates the severity of the liquidity shortage, adding, “No liquidity has ever arrived from abroad, and the current funds are what were available in the banking system before the war, which operates at a minimum.”

He warned that the crisis may worsen and lead to the complete disappearance of liquidity, and not just its scarcity, if the situation continues as it is for several weeks.

Regarding the impact of the crisis, Abu Jayab explained that it causes increased suffering for citizens and exacerbates their tragedy, noting that many families are unable to buy food and drink, and receive “relief” money transfers from their children and relatives abroad, but they are unable to receive them due to lack of liquidity.

Abu Jiab expresses his pessimism about the possibility of resolving the crisis or alleviating its severity, without reaching a ceasefire and ending the war.

He concludes his speech by saying, "The means of solution are known, but the problem is that they collide with Israeli politics and the war, and without a ceasefire there will be no real solution to the liquidity crisis."

Source: Al Jazeera