Partial Reopening of Gaza Banks Amidst Severe Liquidity Crisis Strangling the Economy.

Partial Resumption of Bank Operations in Gaza Amidst Ongoing Liquidity Crisis, and Its Impact on Reconstruction and the Local Economy.

In a long-awaited move, banks in the Gaza Strip have partially resumed their operations after a long hiatus due to the difficult conditions the sector has endured. This resumption represents a glimmer of hope towards restoring financial activity in the region.

However, this return still faces significant challenges, most notably the cash liquidity crisis that hinders the full provision of withdrawal and deposit services.

Major banks such as Bank of Palestine, Bank of Jerusalem, and the Arab Islamic Bank have reopened their branches in various areas, but they provide limited banking services. The Palestinian Islamic Bank receives customers at its main branch in Gaza for shortened working hours.

An official at the Palestinian Islamic Bank confirmed that the available services include most operations except for withdrawals and deposits, due to a lack of liquidity. Efforts are currently focused on facilitating customers’ access to their accounts electronically, pending a solution to the liquidity crisis.

He pointed out that providing liquidity is the responsibility of the monetary authorities in charge of supplying funds to the sector, and that injecting liquidity is a prerequisite for stimulating the economic cycle.

Estimates indicate that a large proportion of the banking infrastructure in Gaza has been damaged or destroyed, forcing citizens to resort to the black market to obtain cash, with high commissions.

Economic experts emphasize that financial reconstruction requires a comprehensive plan to ensure the flow of cash, the operation of ATMs, and the expansion of electronic payment, warning that the continued shortage of cash will lead to economic paralysis and deepen dependence on informal channels.

While some see the return of banks as a “ray of hope,” others consider it merely a “cosmetic” step unless the liquidity crisis is resolved radically.

The Palestinian Monetary Authority affirms that it is working to secure the entry of cash into the sector and address the crisis gradually, noting that the re-operation is being carried out according to a phased plan aimed at ensuring the return of financial services in an organized and safe manner.

Experts confirm that providing cash liquidity is the radical solution to revive the economy in Gaza, and that the continued absence of cash means the continuation of financial paralysis, regardless of re-operation attempts.

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