New shekel

New shekel
Yuvalf123 · Use permitted by the BOI, Currency Department · source
Name	New shekel
Local name	Sheqel ẖadash
Iso code	ILS
Iso numeric	376
Subunit name	agora
Subunit ratio	1/100
Introduced	1985
Pegged to	None
Inflation rate	variable
Issuing authority	Bank of Israel

New shekel

The New shekel is the legal tender introduced in 1985 and administered by the Bank of Israel. It serves as the currency for Israel, circulated in coinage and banknotes used in commerce across Jerusalem, Tel Aviv, Haifa, and other localities, and is accepted in cross-border transactions involving the Palestinian territories and international trade partners. The unit replaced the Israeli pound and has been a subject of fiscal policy decisions involving the Ministry of Finance, the Knesset, and international financial institutions.

History

The currency reform that created the New shekel followed periods of hyperinflation that involved policy actors such as the Bank of Israel, Prime Ministers, Finance Ministers, and economic advisors who referenced models from the International Monetary Fund, World Bank, and Organisation for Economic Co-operation and Development. Influences included historical episodes like the transition from the Palestine pound under the British Mandate, interactions with regional actors including Jordan and Egypt during diplomatic developments such as the Camp David Accords, and comparative reforms in countries like Argentina, Brazil, and Turkey. Political events in Jerusalem, the Knesset debates, and legislative acts shaped adoption. Bank of Israel governors, Israeli statisticians, and central bank committees implemented stabilization programs, which drew on examples from the Federal Reserve, European Central Bank, Bank of England, and Bank of Japan. The transition involved coordination with postal services, Israel Defense Forces procurement, and commercial banks including Bank Hapoalim, Bank Leumi, Mercantile Discount Bank, and Mizrahi-Tefahot Bank. Public information campaigns referenced cultural institutions such as the Hebrew University of Jerusalem, Tel Aviv University, and museums in Haifa to explain denominations and usage.

Design and denominations

Coin and banknote designs were produced by artists, engravers, and designers collaborating with museums, archives, and institutions like the Israel Museum, the Jewish National Fund, and the National Library of Israel. Denominations include coins and banknotes, with coins minted for circulation by the Israel Coins and Medals Corporation and struck by minting partners. Portraits and motifs on notes reference figures and sites connected to culture and history, including composers, poets, scientists, and archaeological sites. Design choices were influenced by considerations seen in currencies such as the United States dollar, euro, British pound sterling, Swiss franc, Japanese yen, Canadian dollar, and Australian dollar. Denominations mirror policy practices used by central banks like the Reserve Bank of India, People’s Bank of China, and Sveriges Riksbank. The visual language draws on typographers, printers, and security firms with experience supplying features to the Banco de México, South African Reserve Bank, and Norges Bank. Banknotes circulate in multiple series and editions used by retailers, transportation systems in Tel Aviv, municipal authorities in Haifa, and markets in Beersheba and Nazareth.

Monetary policy and issuance

Monetary policy decisions are made by the Monetary Committee of the Bank of Israel in coordination with Israel’s Ministry of Finance, referenced alongside central bank practices at the European Central Bank, Federal Reserve Board, Bank of England, and Bank of Canada. The Bank of Israel sets interest rate targets, reserves, and open market operations, interacting with global capital markets, sovereign debt issuances, and credit institutions including the Bank for International Settlements and major commercial banks. Currency issuance follows legal frameworks enacted by the Knesset and implemented through the Bank of Israel, with printing contracts often awarded to specialized firms that supply banknote paper and coins to national mints such as the Royal Mint, Swissmint, and United States Mint. Policy tools are periodically adjusted in response to macroeconomic indicators published by the Central Bureau of Statistics, Ministry of Finance forecasts, and analyses by international bodies such as the International Monetary Fund and Organisation for Economic Co-operation and Development.

Exchange rate and circulation

The currency floats with managed interventions and is traded in foreign exchange markets alongside major pairs such as the US dollar, euro, pound sterling, Japanese yen, Swiss franc, Canadian dollar, and Australian dollar. Exchange rate movements are monitored by foreign exchange desks at global banks including HSBC, Citigroup, JPMorgan Chase, Goldman Sachs, Deutsche Bank, and Barclays. Circulation involves commercial banking networks, automated teller machines operated by banks like Bank Leumi and Bank Hapoalim, retail payment systems provided by Visa, Mastercard, American Express, local payment processors, and emerging fintech firms. Cross-border trade affects exchange dynamics with trading partners including the United States, European Union members, China, India, Russia, and neighboring states like Egypt and Jordan. Tourism flows from countries such as the United States, United Kingdom, Germany, and France also influence demand and cash usage in cities such as Tel Aviv and Jerusalem.

Security features

Security elements on banknotes and coins include watermarks, security threads, microprinting, color-shifting inks, holograms, tactile features for the visually impaired, and advanced substrates produced by specialist firms that also supply features to the Reserve Bank of Australia, Banco Central do Brasil, and Bank of Canada. Counter-counterfeiting coordination involves law enforcement agencies, customs authorities, Interpol, and industry associations that include security printers, minting houses, and forensic laboratories. Authentication practices are disseminated through museums, archives, banks, and public awareness campaigns conducted by the Bank of Israel, Ministry of Finance, and consumer organizations.

Commemorative and collector coins

Commemorative and collector issues are produced for historical anniversaries, cultural milestones, scientific achievements, and sporting events, often struck by the Israel Coins and Medals Corporation and marketed to collectors, museums, and investors. Themes have honored figures and events linked to institutions like the Hebrew University, Weizmann Institute, Technion, Yad Vashem, and cultural festivals in Jerusalem and Tel Aviv. Collector programs align with numismatic traditions found at the Royal Canadian Mint, United States Mint, and Royal Mint, and attract interest from dealers, auction houses, and collectors in Europe, North America, and Asia.

Category:Currencies of Israel