The currency has climbed 10% this year to about 3 per dollar, the second-biggest gain among major currencies tracked by Bloomberg.
While politicians cite the rise as evidence of economic resilience, business leaders say the stronger shekel is increasing pressure on Israel's crucial technology sector.
The surge comes despite global condemnation of Israel's regional wars, giving the government a political talking point even as exporters and tech firms face growing anxiety.
With its central bank on the sidelines, how can Israel's tech industry survive the ongoing 'shekel shock'?
Is Israel's pension system accidentally sabotaging the nation's high-tech economy through its currency hedging?