Feb 25 • 11:21 UTC 🇶🇦 Qatar Al Jazeera

A severe liquidity crisis strikes Gaza and disrupts Palestinian lives

A liquidity crisis in Gaza is severely affecting the financial lives of Palestinians due to the deterioration of paper currency and the shutdown of banks amid ongoing conflict.

A severe liquidity crisis has emerged in Gaza, critically affecting the financial stability and daily lives of Palestinians. With the clashes and ongoing war, many banks have either closed or been destroyed, leading to a significant shortage of cash. As a result, people are facing difficulties in accessing the money they need for everyday transactions, which has compounded their challenges during an already tumultuous time.

In the absence of new banknotes, many residents have resorted to using tattered and worn-out bills that have lost their validity partially. This situation has forced citizens to innovate out of necessity, as some have begun to establish informal kiosks that specialize in repairing and restoring damaged currency notes. These makeshift solutions highlight not only the crisis's severity but also the resilience of the Palestinian people in trying to navigate their financial struggles amidst ongoing hardship.

The implications of this liquidity crisis extend far beyond mere inconvenience; it underscores the broader economic challenges faced by Gaza's population. The breakdown of traditional banking services paired with the physical destruction of financial institutions creates a debilitating environment for economic activity, further exacerbating the humanitarian issues faced by Palestinians. Solutions to restore liquidity and stabilize the economy are urgently needed to prevent a deepening crisis as civilians attempt to cope with the fallout from the conflict.

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