A significant impact of the scarcity of cash liquidity on market movement in the Gaza Strip (Al Jazeera)

Gaza -

Question: “Where did the cash go?” The Gazans are not ignorant of his answer, but they cry out in pain, as the repercussions of the scarcity of cash are killing them, and worsening their living conditions, in light of a fierce Israeli war accompanied by severe isolation and a stifling siege.

For the second month in a row, Abu Nasser's attempts to withdraw his monthly salary from the ATM in two branches of the Bank of Palestine in the city of Rafah, south of the Gaza Strip, were unsuccessful. This government employee in the Palestinian Authority attributes the reason to severe crowding and the lack of sufficient cash liquidity.

The authority is about to disburse the current March salary to its employees in the sector, at a time when Abu Nasser tells Al Jazeera Net, “I have not been able to withdraw a single shekel from the bank in the past two months, and I changed it for more than that, and in the end I was forced to withdraw an amount from one of the currency dealers.” For 10% commission.

This is a large percentage, isn't it? The forty-year-old employee smiles and says, "This merchant is a friend of my father. He considers himself to have served me and done me a favor. Other merchants and money exchange shops charge more than that, and the commission reaches 15%."

Battle of Al-Sarraf

During the past two months, Abu Nasser tried by all means to reach the ATM, and every time he emptied the money before it was his turn due to the severe crowding, those who preceded him to the ATM risked reserving their places from the early hours of dawn, which he did not do due to the dangers of going out at night in the shadow of the overflight. Intense occupation military aviation.

Even those who go out at night are not so lucky, and he says, "The need for a money changer in these times is like fighting a battle for survival, as severe disputes occur that reach the point of fistfights, and the worst group of thugs and money changer brokers emerged from the war."

Employees in this category, as well as currency dealers and money exchange shop owners, complain about deliberately withdrawing large sums of money to empty the ATM of money, especially in branches of the Bank of Palestine, which holds the largest number of accounts of employees in the public and private sectors and employees of international organizations in the sector.

According to Abi Nasser, he saw those who withdraw large sums of money and hire “thugs” to stand in line among the people, and deliberately create problems in order to “sabotage and spread chaos, and seize the largest possible sums of money from the cashier in order to create a crisis and blackmail the citizen by resorting to them to obtain his salary in exchange for... High commission.

The liquidity crisis affects the lives of more than 1,300,000 residents and displaced people in the city of Rafah, south of the Gaza Strip (Al Jazeera)

Where is the cash?

In addition to what Abu Nasser pointed out about the role of what he described as “thugs and currency traders” in deepening the cash liquidity crisis, the occupation bears responsibility for the massive destruction of bank headquarters and automated teller machines, and its refusal since before the outbreak of the war on October 7 last to supply Banks are provided with cash liquidity, specifically from the shekel and dollar currencies most widely traded in the sector.

Last Sunday, the Palestine Monetary Authority said that a number of bank branches and headquarters were destroyed, and that it was not possible to open the remaining branches to carry out withdrawals and deposits in all of the Gaza Strip due to the bombing, harsh field conditions, power outages, and the security reality.

This situation resulted, according to the Monetary Authority’s statement, in an unprecedented crisis in the abundance of cash liquidity in the hands of Gazans and in the markets, and the crisis worsened with most ATMs being out of service.

The Monetary Authority is following up on residents’ complaints about extortion operations carried out by people, merchants, and some owners of unlicensed exchange shops, using direct debit machines at points of sale, or money transfers on banking applications, and said, “These people are exploiting the residents’ need for cash while they continue to be unable to reach bank branches and ATMs.” They charge a percentage of up to 15% for any amount withdrawn from the citizen’s account by plastic cards or transfer in exchange for handing over the remaining part in cash.”

Tools of occupation

The Monetary Authority’s statement did not mention the temptations that Gazans have been exposed to recently, and it is not known precisely whether they are individual or organized, but their goal is to withdraw cash from the hands of citizens in exchange for interest of up to 8%, which is deposited in their bank accounts.

They promote their attractive financial offers through social media platforms, or through traditional means from person to person, and in order to achieve their goals, they use the enticement of high interest and the intimidation of losing their money as a result of war and displacement.

In the opinion of the Head of the Economics Department at An-Najah National University, Dr. Nael Moussa, those behind these campaigns to withdraw cash from the hands of citizens are “the merchants of blood and wars because they are aware of the high commercial value of cash in times of wars and emergencies, and if the campaigns are organized, there may be parties or networks behind them with goals.” "Political economic."

This economic expert equated “the one who communicates with the occupation with the one who trades in the blood of his people during wartime,” and asked in his interview with Al Jazeera Net, “Is there a difference between someone who helps the occupier kill his people by bombing and someone who suffocates his people and fights them for a living?”

In addition to the direct responsibility of the occupation, expert and economic analyst Dr. Tariq Al-Hajj does not rule out that the “cash crisis” is caused by “hidden hands, whether from war merchants, or perhaps from the tools the occupation uses to fight the people of Gaza by tightening the financial stranglehold and the economic blockade.”

Al-Hajj told Al Jazeera Net that it has become clear since the beginning of the war that Israel is working to destroy the infrastructure of all aspects of life, including the banking system. It has also destroyed the headquarters of many banks and ATMs, such as the Bank of Palestine, which accounts for 75% of Palestinian banking.

According to the Palestinian Banks Association, headquartered in Ramallah, there are 56 branches and 92 ATMs affiliated with the various banks operating in the Palestinian territories across the Strip, and accurate statistics are not yet available on the level of destruction that befell them due to the war.

In the case of the city of Rafah, which currently houses approximately 1,300,000 Palestinians, representing more than half of the population in the Gaza Strip, the Bank of Palestine and other banks face major challenges in providing the cash liquidity that meets the needs of this huge population, according to Al-Hajj.

Source: Al Jazeera