Israeli new shekel
The Israeli new shekel (Hebrew: שֶׁקֶל חָדָשׁ sheqel ẖadash; sign: ₪; code: ILS), also known as simply the Israeli shekel (Hebrew: שקל ישראלי), is the currency of Israel and is also used as a legal tender in the Palestinian territories of the West Bank and the Gaza Strip. The new shekel is divided into 100 agora. The new shekel has been in use since 1 January 1986, when it replaced the hyperinflated old shekel at a ratio of 1000:1.
The currency sign for the new shekel ⟨ ₪ ⟩ is a combination of the first Hebrew letters of the words shekel (ש) and ẖadash (ח) (new). It was previously known as the new Israeli shekel and the non-official abbreviation of NIS (ש”ח and ش.ج) is still commonly used domestically to denominate prices and also appears on the Bank of Israel’s web site. However, the official international currency code of the Israeli new shekel is ILS, as set by the International Organization for Standardization under ISO 4217.
The origin of the name “shekel” (שקל) is from the ancient biblical currency by the same name. Shekel is any of several ancient units of weight or of currency in ancient Israel. Initially, it may have referred to a weight of barley. In ancient Israel, the shekel was known to be about 180 grains (11 grams or .35 troy ounces).
From the formation of the modern State of Israel on 14 May 1948 through 1952 banknotes continued to be issued by the Anglo-Palestine Bank as the Palestine pound which was pegged to the British Pound. In 1952, the Anglo-Palestine Bank changed its name to Bank Leumi Le-Yisrael (National Bank of Israel) and the currency name became the Israeli pound.
Israeli pound (1952–1980)
Main article: Israeli pound
The Israeli pound (לירה ישראלית, “lira yisraelit”) was the currency of the State of Israel from June 1952 until 23 February 1980, when it was replaced with the shekel on 24 February 1980. From 1955, after the Bank of Israel was established and took over the duty of issuing banknotes, only the Hebrew name was used, along with the symbol “I£”. The pegging to the British Pound was abolished on 1 January 1954, and in 1960, the sub-division of the Israeli pound was changed from 1000 prutot to 100 agorot.
During the 1960s, a debate over the non-Hebrew name of the Israeli currency resulted in a law ordering the Minister of Finance to change the name pound into a Hebrew name, shekel (שקל). The law allowed the minister to decide on a proper date for the change. The law did not come into effect until February 1980, when the Israeli government decided to change the monetary system and introduce the shekel at a rate of 1 shekel = I£10.
Main article: Old Israeli shekel
The shekel, now known as the old shekel, was the currency of the State of Israel between 24 February 1980 and 31 December 1985. Both it and its predecessor the Israeli pound experienced frequent devaluations against foreign currencies during the 1960s and ’70s. This trend culminated in the old shekel experiencing hyperinflation in the early 1980s. After inflation was contained as a result of the 1985 Economic Stabilization Plan, the new shekel was introduced, replacing the old shekel on 1 January 1986 at a rate of IS 1,000 to ₪1.
New shekel (1985–present)
Since the economic crisis of the 1980s and the subsequent introduction of the new shekel in 1985, the Bank of Israel and the government of Israel have maintained much more careful and conservative fiscal and monetary policies, and have gradually introduced various market-based economic reforms. In addition, the signing of free trade agreements helped the Israeli economy become more competitive, while heavy investment in its industrial and scientific base allowed the country to take advantage of opportunities associated with the rise of the global knowledge economy, thus greatly increasing exports and opening new markets for its products and services. As a result of these factors, inflation has been relatively low and the country now maintains a positive balance of payments, with a current account surplus equivalent to about 3% of its GDP in 2010. Consequently, its currency has strengthened considerably, rising approximately 20% in value relative to the US dollar in the 2000s decade, thereby reversing the trend of historical weakness the Israeli currency exhibited in the decades prior.
Since 1 January 2003, the new shekel has been a freely convertible currency. Since 7 May 2006, new shekel derivative trading has also been available on the Chicago Mercantile Exchange. This makes the new shekel one of only twenty or so world currencies for which there are widely available currency futures contracts in the foreign exchange market. It is also a currency that can be exchanged by consumers in many parts of the world. On 26 May 2008, CLS Bank International announced that it would settle payment instructions in new shekels, making the currency fully convertible.
In 1985, coins in denominations of 1 agora, 5 and 10 agorot and ₪½ and ₪1 were introduced. In 1990, ₪5 coins were introduced, followed by ₪10 coins in 1995. Production of 1 agora pieces ceased in 1990, and they were removed from circulation on 1 April 1991. A ₪2 coin was introduced on 9 December 2007. The 5 agorot coin, last minted in 2006, was removed from circulation on 1 January 2008.
In April 2011, it was reported that new coins would be minted that would use less metal and thus lower costs. Counterfeiting would also be harder. The Bank of Israel is considering dropping the word “new” on the planned coins series. If approved, this would be the first replacement of all coins since the introduction of the new shekel coins in September 1985. The coins are minted by the Korea Minting and Security Printing Corporation (KOMSCO).
Series A (1985–1999)
Beginning on 4 September 1985, banknotes were introduced in denominations of ₪5, ₪10, and ₪50. An ₪1 note followed on 8 May 1986 and the ₪20 note issued on 2 April 1988 completed the family. The ₪1, ₪5 and ₪10 notes used the same basic designs as the earlier IS 1000, 5000, and 10 000 notes but with the denominations altered.
In 1986, ₪100 notes were introduced, followed by ₪200 notes in 1991. The ₪1, ₪5 and ₪10 notes were later replaced by coins.
Series B (1999–2017)
The Second series of bank notes was released in 1999, replacing the first series by 2005. A plan to issue an ₪500 banknote, carrying the portrait of Yitzhak Rabin, was announced shortly after Rabin’s assassination in 1995. However, due to low inflation rates, there was no need for such a banknote and it was never issued.
Series C (2014–present)
The committee proposed that the new series would bear the portraits of prominent Hebrew poets, among them Rachel, Shaul Tchernichovsky, Leah Goldberg and Nathan Alterman. In December 2010, it was announced that the series would feature portraits of Menachem Begin, Yitzhak Rabin, and Rachel and Shmuel Yosef Agnon. When Begin’s family opposed the decision, the committee’s original proposal was readopted.
On 14 November 2012, the Bank of Israel announced that the new series of banknotes is in the final stages of design. The first of the new banknotes to begin circulation was in the ₪50 denomination on 16 September 2014, followed by the ₪200 note on 23 December 2015. The final two denominations, ₪20 and ₪100, were issued on 23 November 2017, completing the “Series C” banknote series.
With the issuing of the third series, the Bank of Israel has adopted the standard English spelling of shekel and plural shekels for its currency. Previously, the Bank had formally used the Hebrew transcriptions of sheqel and sheqalim (from שְׁקָלִים).
The banknotes are printed by Orell Füssli Security Printing of Switzerland.
- Bank of Israel
- Economy of Israel
- According to Article 4 of the 1994 Paris Protocol The Protocol allows the Palestinian Authority to adopt additional currencies. In the West Bank the Jordanian dinar is widely accepted and in the Gaza Strip the Egyptian pound is often used.
- · https://www.20min.ch/finance/news/story/Israel-laesst-in-Zuerich-Geld-drucken-25053913
- · “Israeli new shekel conversion”. Metric Conversion charts and calculators. Retrieved 15 March 2018.
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- · One Palestine Pound, IL: Bank of Israel, archived from the original on 27 April 2006
- · One Israeli Pound, IL: Bank of Israel, archived from the original on 27 September 2007
- · First Series of the Pound, IL: Bank Le-Israel, archived from the original on 27 September 2007
- · “CME to Launch Foreign Exchange Contract on Israeli Shekel” (Press release). Chicago Mercantile Exchange. 6 April 2006.
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- · “shekel begins trading on global markets”. jpost.com. Jerusalem Post. Archived from the original on 13 August 2011. Retrieved 15 March 2018.
- · CLS Press Release (26 May 2008). “CLS Bank live with Israeli shekel and Mexican Peso”. Archived from the original on 30 May 2008.
- · “About the Agora and New Shekel Series”. Banknotes and Coins Catalog. Bank of Israel. Retrieved 26 December 2007.
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- · “10 NEW SHEQALIM”. Banknotes and Coins Catalog. The Bank of Israel. Retrieved 26 December 2007.
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- · “Cancellation of the 5 agora coin” (in Hebrew). The Bank of Israel. 1 January 2008. Retrieved 4 September 2016.
- · Tomer Avital’s report in Calcalist, 21 April 2011 (Hebrew)
- · Gad Lior’s report in Ynet, 21 April 2011
- · Note that nickel-clad steel 1 new sheqalim coins were issued in 1994 and 1995
- · Linzmayer, Owen (2012). “Israel”. The Banknote Book. San Francisco, CA: www.BanknoteNews.com.
- · “The 500 NIS banknote that was never released (Obverse)”.
- · שטר בסימן שאלה, Bulletin of the Numismatics Association in Israel, October 2005
- · Press release, Bank of Israel, 19 December 2009
- · Press release, Bank of Israel, 10 March 2011
- · השטר החדש הושק: “יהי קשה לזייף שטרות” [The new banknote was launched: “It will be difficult to counterfeit banknotes”] (in Hebrew). ynet. 10 September 2014. Retrieved 10 September 2014.
- · “Israel’s new NIS 200 note enters circulation today”. Globes. 23 December 2015. Retrieved 23 December 2015.
- · Press release, Bank of Israel: The next banknotes in the new series – the NIS 20 and NIS 100 banknotes – will be distributed to the public on from Thursday, November 23, 2017 – 5 Kislev 5778 Bank of Israel (www.bankisrael.gov.il). 16 November 2017
- · Press release, Bank of Israel: Information on the new series of banknotes 14 November 2012
- · Press release by the Bank of Israel: Images and descriptions on the new series of Israeli new shekel banknotes Bank of Israel (www.bankisrael.gov.il). 28 April 2013. Retrieved on 1 May 2013.
- · “Third Series of the New Shekel”, Currency, Bank of Israel
- “Second Series of the New Shekel”, Currency, Bank of Israel.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives.