Israeli Shekel (ILS)
The Israeli Shekel, known by its code ILS, is the official currency of Israel. The symbol “₪” is a combination of the Hebrew letters “ש” (Shin) and “ח” (Khet), which stand for “shekel chadash”, meaning “new shekel” in Hebrew.
Beyond its everyday use, the Shekel plays an important role in regional trade and has helped stabilize Israel’s economy over time.
In this guide, you’ll find everything you need to know about the Shekel, including its history, current exchange rates, and key information.
About the Israeli Shekel
- Currency Name
- Israeli Shekel
- Nicknames
- Shek, Kesef (כסף)
- Symbol
- ₪
- Minor Unit
- Agora
- Minor Unit Symbol
- Ag
- Country
- Israel
- Central Bank
- Bank of Israel
- Year Introduced
- 1985 (as the New Israeli Shekel)
- Countries of Usage
- Israel, Palestinian Territories
- Major Currency Rank
- 23
Named After an Ancient Currency:
The term “shekel” has a historical origin and dates back to ancient times. It was used in the region as a unit of weight and currency over 3,000 years ago, particularly during the time of the Biblical kingdoms of Israel and Judah. The name was revived to connect modern Israel to its historical roots.
Multiple Languages on Banknotes:
The banknotes are printed in three languages: Hebrew, Arabic, and English. This reflects Israel’s diverse population, with both Hebrew and Arabic being official languages. Including English also ensures ease of use for international visitors and business transactions.
International Presence:
The Israeli new shekel is one of the most widely traded currencies in the Middle East. In 2008, the shekel was officially recognized by the Chicago Mercantile Exchange (CME), making it possible to trade ILS futures. This recognition showed confidence in the stability of the Israeli economy and its currency.
All ILS Exchange Rates
History
The Israeli Shekel was introduced as the New Israeli Shekel (NIS) in 1985, replacing the old Shekel to stabilize Israel’s economy and combat inflation.
This move was necessary to address the hyperinflation of the early 1980s, which had a significant impact on the country’s financial stability.
The introduction of the new Shekel helped to restore both public confidence and economic equilibrium.
The new currency represented a significant turning point in Israeli financial history, providing a more reliable and resilient monetary foundation.
The Bank of Israel is responsible for monetary policy and the management of the Shekel, ensuring that the currency remains stable and competitive in international markets.
In recent years, the Shekel has undergone several innovations, such as anti-counterfeiting measures and more secure polymer banknotes, which have enhanced both security and durability.
Additionally, the Bank of Israel has made strides in modernizing currency features to adapt to digital advancements, making transactions more secure and efficient for the public.
A Closer Look at the Last Year
The Israeli Shekel (ILS) has experienced notable fluctuations against major international currencies like the Euro (EUR), the British Pound (GBP), and the United States Dollar (USD) over the last year. Here is a closer look at how it has fared:
- EUR/ILS: In the early part of the year, the exchange rate was below 4.0, fluctuating around 3.60 to 3.80 ILS per EUR. The rate began to rise steadily from March onwards, peaking around 4.3 ILS per EUR in October, indicating a period of Euro strengthening against the Israeli Shekel. After peaking, there was a gradual decline, bringing the rate back down to around 4.0 ILS per EUR by the end of the year. Throughout the year, the exchange rate showed periods of sharp upward spikes as well as sudden drops, indicating some volatility, especially during the middle and final quarters.
- GBP/ILS: The year began with the exchange rate 4.10-4.20 ILS per GBP, indicating a relatively weaker Pound compared to the Shekel.
There was a steady upward trend starting in March, with the exchange rate rising to about 4.70 ILS per GBP in June, showing significant strength for the Pound during this period. The rate peaked in October, reaching values above 4.95 ILS per GBP, which represents the strongest point for the Pound during the year. From October onwards, the exchange rate showed a decline, finishing the year at around 4.60 ILS per GBP. - USD/ILS: The year began with the exchange rate just below 3.5 ILS per USD, suggesting that the Shekel was relatively strong against the US Dollar at the start of the year. There was a steady upward trend in the exchange rate starting from March, indicating a strengthening Dollar against the Shekel, reaching a peak around 4.1 ILS per USD in October. The peak in October represents the strongest value for the Dollar during the year. After reaching the peak, the exchange rate started to decline towards the end of the year, falling back to around 3.60 ILS per USD by the end of December, showing some regained strength of the Israeli Shekel.
Correlations
This correlation matrix compares 5 currency pairs, highlighting how strongly their movements align. High positive values indicate pairs that trend together, while strong negative values suggest inverse moves. Correlations closest to zero reflect the weakest relationships, meaning the pairs move largely independently and can provide diversification opportunities. For the Israeli Shekel, the strongest alignment is between ILS/CAD and ILS/EUR (0.914), showing they often move in the same direction. The weakest connection is between ILS/AUD and ILS/USD (0.256), where the correlation is closest to zero, indicating minimal relationship in price movements.
The Israeli Shekel: What Lies Ahead?
The future of the Israeli Shekel (ILS) depends on a mix of global and regional economic factors, including political stability, export performance, and changes in global energy prices.
Political events within Israel, as well as international relations, can significantly impact the Shekel’s strength.
The Bank of Israel plays a critical role in determining the path forward for the Shekel by managing interest rates and implementing monetary policies aimed at keeping inflation in check and supporting economic growth.
The geopolitical environment in the Middle East and Israel’s trading relationships with key economies like the United States, China, and Europe will also have a major impact on the Shekel in the months to come.
As economic conditions remain unpredictable—driven by factors such as fluctuating energy prices, US Federal Reserve decisions, and the resilience of local industries—the Shekel is likely to face a mix of hurdles and growth opportunities in the global market.
The Bank of Israel’s commitment to maintaining financial stability and ensuring investor confidence will be key to the Shekel’s success moving forward.
Additionally, continued innovation and strategic economic partnerships could help bolster the Shekel’s value and enhance its competitiveness internationally.