Updated: Feb 12, 2019
How Israel’s super-low US dollar to shekel exchange rate is not just hurting big businesses, it’s kicking our olim while it’s down.
My profession has existed in Jerusalem for more than 2,000 years. Things have improved a lot since then. Gone are the days of sneaking into a store in town to change a few hundred dollars. Now the State of Israel has regulated the entire industry. What hasn’t changed are the volatile exchange rates that go up and down like a wild roller coaster, leaving everyone dizzy. The most common question I am asked is “what’s happening to the shekel?” — which is typically followed by the more pressing inquiry of “when will it get better?!”
Neither I nor anyone else has a crystal ball, and be wary of any “expert” who tells you that they can predict the future. Just last month, some of the world’s largest financial institutions claimed the shekel is overvalued, yet top Israeli economists predicted the shekel will continue to strengthen in 2018. Both can’t be right.
2016 was a year of high anxiety for UK expats with sterling falling by 15% versus the shekel. US clients experienced similar stresses last year as the dollar fell by over 10% versus a stronger shekel. What will be for 2018?
Who is affected by this? Everyone. Goods are cheaper to import, however, all exports are threatened. Every Israeli firm that sells a product abroad is netting less shekels for delivering the same product. This affects a wide range of products critical to the Israeli economy from fertilizer to high tech. The lower shekel rate is not just a problem for big businesses, ordinary people are affected by this in surprising ways too. More...