Israeli New Shekel (ILS)
The Israeli New Shekel is one of the more freely traded Middle Eastern currencies, supported by Israel's technology-driven export economy.
Convert ILS
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A short history of the Israeli New Shekel
Israel's new shekel was introduced in 1985 as part of a stabilization program that replaced the old shekel at a ratio of 1,000 to one. It followed the earlier Israeli pound and a period of very high inflation. The program paired fiscal and monetary measures with a more disciplined exchange-rate framework, helping establish the currency used today.
The Bank of Israel gradually moved the shekel toward a floating regime during the 1990s. Israel's economy now combines technology exports, services, manufacturing and a growing natural-gas industry, while maintaining substantial foreign-exchange reserves. The shekel can be liquid and resilient, but geopolitical risk can change its direction quickly and may prompt central-bank action.
What moves the ILS exchange rate
The shekel is driven by the contrast between Israel's strong external sectors and the security and policy risks surrounding the economy.
- Bank of Israel and US policy: interest-rate expectations influence capital flows, mortgages and the relative return on shekel assets
- Technology and services exports: foreign investment and high-value exports bring dollars into Israel and can support ILS
- Geopolitical conditions: conflict, security uncertainty and fiscal demands can lead residents and investors to seek foreign currency
- Energy, trade and reserves: gas exports, imports and the central bank's substantial reserves affect the external balance and confidence
The Israeli New Shekel in practice
Israel is highly card-oriented, with contactless payments common in cities, transport and restaurants. Shekel cash is still useful at markets, small vendors and some taxis. Travelers should confirm whether a terminal is charging ILS or offering dynamic conversion into a home currency. The shekel is the everyday legal tender even when hotels or tour operators display dollar or euro estimates.
Israel has important corridors with North America, Europe and Jewish communities worldwide, alongside technology and defense trade. Businesses may earn dollars or euros while paying local wages and tax in shekels, so currency hedging can matter when geopolitical news drives rapid moves. Remittance customers should compare the final ILS received and the provider's settlement terms.
Popular Israeli New Shekel conversions
USD/ILS is the main global reference pair and reacts to US rates, technology flows and security headlines. EUR/ILS and GBP/ILS serve European travel and trade, while ILS/JPY and ILS/CHF can reflect broader safe-haven and risk movements. ILS/AED and ILS/SAR are used in regional business corridors.
Frequently asked questions
What is the difference between the shekel and the new shekel?
The new shekel replaced the old shekel in 1985 at 1,000 old shekels for one new shekel. ILS is the ISO code for the current currency; 'shekel' is the name commonly used in daily speech.
Is the Israeli Shekel pegged to the dollar?
No. The shekel has floated since the 1990s. The Bank of Israel can intervene or adjust policy in exceptional circumstances, but ordinary USD/ILS pricing is determined by the market.
Can I pay with dollars in Israel?
Some tourist businesses may accept dollars, but prices and change are usually clearer in shekels. Cards are widely accepted, and visitors should choose ILS at payment terminals to avoid dynamic-conversion markups.