Israeli Shekel Hits 30-Year High at 2.90 per Dollar as $23 Billion Hedging Fuels Rally
Updated
Updated · i24NEWS · May 24
Israeli Shekel Hits 30-Year High at 2.90 per Dollar as $23 Billion Hedging Fuels Rally
3 articles · Updated · i24NEWS · May 24
At 2.90 per dollar since early May, the shekel has climbed from about 4 in October 2023 to its strongest level against the U.S. currency in 30 years.
About $23 billion in pension-fund hedging between August 2025 and February 2026 helped drive the move, with economists saying Wall Street-linked flows may explain up to 40% of the recent appreciation.
A Middle East ceasefire, a weaker dollar and still-strong domestic indicators also supported the currency: the Bank of Israel sees 3.8% growth in 2026, inflation was 1.9% in March and unemployment 3.2%.
The rally is squeezing exporters, especially tech firms, even as it lowers import and travel costs for households; exports fell from more than $76 billion in 2022 to under $59 billion last year.
That pressure is testing policymakers: the Bank of Israel has kept rates at 4%, while the finance ministry has launched AI funding to help companies hurt by the strong shekel.
Israel's soaring shekel is crushing its tech sector. Is this economic success actually a hidden weakness?
Is the US stock market boom unintentionally crippling Israel's most important industry through a currency squeeze?
Israeli Shekel Hits 30-Year High: Causes, Economic Impacts, and Policy Dilemmas in 2026
Overview
In early May 2026, the Israeli shekel surged to its strongest level against the US dollar in over 30 years, driven by optimism about a potential ceasefire and a sharply improved domestic economic outlook. Falling core inflation and near-zero inflation in tradable goods created a stable environment, reducing the need for aggressive central bank action. At the same time, a weakening US dollar added to the shekel’s strength. While this benefits consumers through cheaper imports, it creates challenges for exporters, as Israeli goods become more expensive abroad, raising concerns about jobs and economic growth.