In the shattered aftermath of prolonged conflict, Gaza’s economy is nearing collapse as the enclave grapples with a severe cash shortage. With nearly all banks and ATMs destroyed or shuttered and new currency shipments blocked, residents must rely on informal cash brokers—often described as a mafia-style network—to access funds. These intermediaries charge staggering commission rates of up to 40 percent, siphoning a significant portion of already limited resources from ordinary families just trying to survive.
Inflation has reached crippling levels. According to the World Bank, prices have surged approximately 230 percent over the past year. Essential items such as flour and sugar, once affordable, now cost many multiples of their pre-war prices. Between makeshift repairs, battered banknotes are deteriorating to the point of being unusable, prompting a bizarre new trade in money restoration. For a nominal fee, vendors attempt to make frayed bills acceptable—yet even taped-up shekels are frequently rejected during transactions .
The root of this crisis lies in Israel’s decision to block new Israeli-shekel deliveries to Gaza, a strategy aimed at undermining Hamas’s operational capacity. This policy, combined with the destruction of financial infrastructure and mass withdrawals by affluent Gaza residents, has left the territory paralyzed. With no official banking support and ATMs largely inoperative, Gaza’s financial ecosystem has fallen into the hands of underground brokers who dictate cash’s value and availability .
Wages, once deposited into bank accounts, lose much of their value before they reach workers. A public sector employee, for instance, might send 2,700 shekels through a broker but receive only about 1,600 in cash—a loss of nearly 40 percent. This effectively acts as a regressive tax on those least able to bear it. With unemployment above 80 percent and savings depleted, many families are forced to sell whatever assets they have—gold, furniture, even personal belongings—to purchase food and medicine.
Attempts to shift toward digital or electronic payments have failed to gain traction. Electric outages and the disintegration of the internet and telecommunications infrastructure make mobile or online transactions unviable. Moreover, most merchants insist on physical cash, particularly undamaged high-value banknotes, for everyday sales such as groceries and transportation.
The effect on daily life is stark. A two-kilogram bag of flour now costs roughly USD 12 every two days—tripling previous costs. A kilogram of sugar sells for USD 80‑100, compared to under USD 2 beforehand. Gasoline fetched around USD 25 per liter, nearly USD 95 per gallon, when available. And even when families manage to get cash, they often find merchants refusing tattered bills, forcing them to pay again for legitimate currency reprints.
The brokers wield immense power, controlling both supply and access. Whether these middlemen are tied to organized crime or militant groups remains unclear, but their economic dominion appears unchallenged, with no regulatory body capable of oversight amid wartime breakdown. Palestinian consumers, meanwhile, are left to swallow a heavy, unregulated “broker’s tax” simply to access money they already own.
As desperation escalates, Gazans increasingly turn to humanitarian aid. Long lines form at UN and NGO food distribution centers as families scramble to cover their daily basics. The scene underscores the collapse of Gaza’s financial infrastructure and social safety net: without access to functioning banks or reliable ATMs, money itself has become a scarce commodity.
Until a ceasefire enables reconstruction of banking systems, resumption of regulated currency distribution, and restoration of normal economic channels, Gaza’s residents will live under what experts describe as a “liquidity crisis.” In this new reality, simply walking into a shop, paying with clean cash and purchasing a loaf of bread has become a luxury millions can no longer afford.
