ILS - Israeli Shekel

Overview of the Israeli Shekel (ILS)

Israel's new Shekel is issued and managed by the Bank of Israel, commonly referred to as ILS, New Shekel in English, שקל חדש in Hebrew, and شيكل جديد in Arabic. This currency was introduced on January 1, 1986, replacing the old Shekel. The international currency code for this coin is ILS, and its symbol is ₪. Each shekel can be divided into 100 smaller units called agoras or agorot.

The Bank of Israel will be primarily responsible for controlling this new Shekel, ensuring that the Shekel maintains high value and liquidity in the market. The unit responsible for printing the new Shekel banknotes is Orell Füssli, and the unit for minting the coins is the KOMSCO mint. 

Israeli Shekel (ILS) Denominations

Currently, the new Israeli Shekel is in circulation with coins and banknotes and has the following denominations:

• Coins: 10 agoras, ₪1/2, ₪1, ₪2, ₪5, ₪10

• Banknotes: ₪20, ₪50, ₪100, ₪200

Israeli Shekel (ILS) History

The new Israeli Shekel was officially launched on January 1, 1986, marking an important turning point in Israel's monetary history. This currency was initially introduced at a rate of 1 new shekel = 1,000 old shekels with the aim of addressing the severe inflation that had previously weakened the Israeli economy.

Since its launch, the Israeli government and the Bank of Israel have cautiously implemented monetary fiscal policies along with market-based economic reforms to stabilize the currency. The result was a significant reduction in inflation, strengthening the value of the New Israeli Shekel. 

Throughout the 2000s, the New Israeli Shekel gradually strengthened against the US dollar and increased in value by about 20% from 2001 to 2011.

Thanks to prudent monetary and financial policies with market-oriented economic reforms, Israel has effectively controlled inflation and significantly improved its economy. The New Shekel also became a freely convertible currency in 2003 and was officially traded on the international foreign exchange market, reflecting the increasing stability and strength of the Israeli economy.

Since May 7, 2006, futures contracts of this currency have been listed on the Chicago Mercantile Exchange, placing the currency on the list of widely traded currencies in the international market. 

On May 26, 2008, CLS Bank International announced the processing of payments in the Israeli New Shekel, completing the transition of this currency and enabling its full use in international transactions.

The currencies that were once in circulation in Israel

Initially, Israel used the Palestinian pound issued by the Anglo-Palestine Bank, which was pegged to the British pound. In 1952, the Palestinian pound was renamed the Israeli pound when the Anglo-Palestine Bank became the Bank Leumi Le-Yisrael.

From 1952 to 1980, the Israeli pound underwent several devaluations. In 1960, a debate erupted over the use of the term "lira," which is not Hebrew, leading to the decision to rename the currency to Shekel in 1980.

However, in 1980, the Shekel fell into a state of inflation. To cope with this situation, Israel introduced the Shekel at an exchange rate of 1000 Shekels = 1 Shekel. 

Indonesian Rupiah (IDR) exchange rate

The Israeli Shekel is subject to a floating exchange rate policy to regulate the exchange rate. This policy is based on a basket of currencies from countries that have trade, debt, and investment relations with Israel. The main objective of this policy is to control inflation and promote national economic growth.

The historical exchange rate of the new Israeli Shekel

• The Israeli Shekel (ILS) has experienced significant exchange rate fluctuations since its issuance on January 1, 1986. At that time, the exchange rate of the New Shekel against the US Dollar was 1.36.

• From 1986 to 1991: The exchange rate increased to 1 ILS = 2.59 USD. The increase in value reflects fluctuations in the global economy as well as the internal economic situation in Israel during the early period of this currency.

• 1991 - 1996: The exchange rate of the Shekel continued to rise, reaching 3.36 USD in 1996. By 2001, the new Israeli Shekel exchange rate peaked at 4.22 USD, indicating a significant depreciation of this currency against the US dollar during this period.

• 2001 - 2006: The exchange rate decreased to 4.47 USD, indicating a slight recovery. The period from 2006 to 2011 saw the exchange rate decrease further to 3.46 USD, before slightly rising back to 3.77 USD in 2016.

• In addition to the exchange rate against the US dollar, the exchange rate of the new Israeli Shekel also changed significantly when compared to other currencies. In 1986, the exchange rate of the new Israeli Shekel against the Japanese Yen was 0.81 and increased to 4.27 in 2011, before dropping to 3.44 JPY in 2016.

• Similarly, compared to the British Pound (GBP), from 1986 to 2016, the exchange rate of Israel's new Shekel rose from 2.07 GBP to 5.15 GBP. 

The new Israeli Shekel is an important currency in Israel's transactions, but it also experiences significant fluctuations in exchange rates. Don't forget to follow Gocuco to get the latest real-time currency exchange rates!