(Jun. 7, 2026 \/ JNS)\n <\/p>\n
When the Bank of Israel disclosed last week that it had purchased approximately $800 million in May to control the dollar\u2019s slide, the announcement pointed to something more fundamental about the economy Israel has spent two decades building.<\/p>\n
The dollar had fallen to 2.799 NIS, a level that alarmed exporters and high-tech companies whose revenues arrive in dollars but whose costs are denominated in shekels. The Bank of Israel, acting under its market-function mandate rather than its monetary policy one, stepped in and bought. By last weekend, the dollar had recovered to around 2.94 NIS, aided partly by Wall Street declines that prompted Israeli institutional investors to unwind currency hedges.<\/p>\n
Ronen Menachem, chief economist at Mizrahi Tefahot Bank, noted that the purchase was almost entirely offset by government activity, meaning that without the intervention, the shekel would have strengthened even further. He described it as a targeted, non-recurring action, contrasting it with the Bank\u2019s COVID-era interventions worth roughly $30 billion and its moves at the outbreak of war in October 2023. <\/p>\n
\u201cThis is a moderate amount that must be taken with limited liability,\u201d he said, according to Globes<\/a>, adding that the July 6 interest rate decision, which will include new economic forecasts, remains the next meaningful inflection point.<\/p>\n The engine that built its own obstacle<\/p>\n The cause of the shekel\u2019s appreciation is not a mystery, particularly within concerned tech corners. A recent report by the Israel Innovation Authority found that the high-tech sector accounted for roughly half of Israel\u2019s goods and services exports in 2025, a figure that reflects both the sector\u2019s scale and its resilience through a period of sustained conflict. Foreign capital has continued flowing in; dollar revenues have kept arriving. The shekel strengthened because Israel\u2019s economy performed historically well, despite pressure from almost three years of war.<\/p>\n But the IIA report contained a less comfortable observation alongside the headline number. Israeli tech is succeeding globally while gradually \u201cde-Israelizing\u201d operationally<\/a>, raising capital in San Francisco, hiring engineers in Eastern Europe, or managing sales from New York City. The revenues that strengthen the shekel are increasingly generated by companies that are Israeli in birth, but become more global as they grow.<\/p>\n Who pays the price for a strong shekel?<\/p>\n A high-tech company with dollar revenues and global operations can absorb a stronger shekel in its Israeli cost base, particularly with local salaries or office space. But for the portion of the ecosystem that remains anchored in Israel (early-stage startups, mid-size companies with large Israeli workforces, or defense tech firms tied to domestic supply chains), a dollar worth 2.80 shekels is a different operating reality than the 3.60 shekel that prevailed during wartime. One estimate suggests that currency strength adds 21 billion<\/a> shekels in annual labor costs to the industry.<\/p>\n