Israeli New Sheqel
- Country: Israel
- Currency: New Israeli Shekel
- Alias: Israeli new sheqel
- ISO 4217 CODE: ILS/376
- Symbol: NIS
Considered by many to be the historical homeland of the Jewish people for thousands of years, the State of Israel is actually a relatively young country, having been founded in 1948. The New Israeli shekel is the third generation of national currency, and was introduced in 1985 by the State of Israel’s official monetary policy organization – the Bank of Israel – to replace its predecessor, the “old” shekel. The name shekel is a derivation of the Hebrew term “Mishqal,” meaning “weight.” The exchange rate regime is of the managed float type, tied to a basket of foreign currencies representing Israel’s largest trading partners.
Background of the Israeli New Sheqel
After 3,000 years of continuous Jewish presence in the region, the modern State of Israel was born in 1948, just three years after the end of World War II, in which an estimated one-third of the world’s Jewish population had been annihilated by the Nazi regime. Israel’s initial population was 600,000. Today, the population has swelled to 6.5 million, 80% of which are Jewish.
Since its founding, Israel has benefited from massive amounts of foreign investment and international aid., much of which has been provided by the United States. In spite of unprecedented efforts at maintaining peace with its Arab neighbors, the regional remains a volatile one, reflected in the fact that an estimated 60% of Israel’s annual national budget is committed to defense-related expenditures.
Israel’s original currency was the lira, also known as the Israeli pound, a term which stems from Britain’s control over much of Palestine in the 20th century. The original shekel was introduced in 1980 at a conversion rate of one shekel for each 10 lira. In an attempt to control currency devaluation and reduce rampant inflation – which reached an all-time high of 500% in 1985 – the original shekel was replaced with the “new shekel” in 1985 at a conversion rate of 1,000 old shekels to each new shekel.
The plural of shekel is “shekelim” (or sheqalim) in Hebrew, though Israelis frequently used the Anglicized plural “shekels” instead.
The New Israeli shekel is divided into 100 agorot. Denominations for coins are NIS 1, NIS 5, NIS 10 and 5 agorot, 10 agorot, and 50 agorot (0.5 NIS). Denominations for banknotes are 20 NIS, 50 NIS, 100 NIS, and 200 NIS.