About the Israeli Shekel (ILS)
The Israeli Shekel is the official currency of Israel, introduced in 1985, replacing the old shekel at a rate of 1,000 to 1 following Israel's successful economic stabilization program that ended hyperinflation. Its ISO 4217 code is ILS and it uses the symbol ₪. The ILS is managed by the Bank of Israel.
The Israeli shekel operates under a free-float regime managed by the Bank of Israel, which intervenes occasionally to limit excessive volatility. Israel's $530 billion economy has evolved into a technology and innovation hub, Israel has more NASDAQ-listed companies than any country outside the US, and the tech sector accounts for over 50% of Israeli exports. The shekel's strength reflects Israel's technology sector prowess and consistent current account surplus, but faces pressure during geopolitical escalations in the region.
ILS Key Facts
| Property | Detail |
|---|---|
| Full Name | Israeli Shekel |
| ISO 4217 Code | ILS |
| Symbol | ₪ |
| Country / Territory | Israel |
| Continent | Asia |
| Decimal Places | 2 |
| Central Bank | the Bank of Israel |
ILS History and Background
The Israeli Shekel (ILS) was introduced in 1985, replacing the old shekel at a rate of 1,000 to 1 following Israel's successful economic stabilization program that ended hyperinflation. the Bank of Israel, the institution responsible for monetary policy in Israel, has maintained the ILS's role as legal tender through successive economic cycles, adjusting interest rates and reserve requirements to manage inflation and support growth. The ILS serves as the domestic currency of Israel, with international exchange facilitated through correspondent banking networks, specialist transfer services, and global forex platforms.
Central bank policy decisions are the most direct tool the Bank of Israel uses to influence the ILS's exchange rate. Interest rate announcements, inflation reports (particularly consumer price index data), and GDP growth figures from Israel are the primary data releases watched by currency traders. When the Bank of Israel raises rates above comparable economies, the ILS tends to attract capital seeking higher yield, and vice versa when rates fall.
ILS Denominations
The Israeli Shekel is subdivided into 100 smaller units (2 decimal places). the Bank of Israel issues the ILS in a range of note denominations for everyday and large-value transactions, plus coins for smaller amounts.
Physical ILS banknotes and coins serve as legal tender within Israel. For international transactions and cross-border transfers, electronic exchange is available around the clock through forex markets, banks, and specialist services like Wise, OFX, and Revolut.
When traveling to Israel, the best exchange rates are typically obtained by using a no-fee debit card at a local ATM rather than airport currency exchange counters, which often charge premiums of 5–8% above the mid-market reference rate.
Is the ILS Pegged to the Dollar?
The Israeli Shekel is a freely floating currency. Its exchange rate is determined by market supply and demand in global foreign exchange markets. the Bank of Israel influences the rate indirectly through monetary policy decisions, primarily interest rate settings, rather than by fixing or pegging the rate to another currency. Some central banks do intervene occasionally to limit extreme volatility, but the ILS rate is not administratively set.
ILS Economic Context and Global Role
The ILS is an active regional currency traded across global foreign exchange markets, with exchange rates available around the clock. Liquidity is typically highest during business hours in Israel's primary time zone, and during the London and New York overlap sessions where international activity in the currency is concentrated.
ILS Exchange Rate Factors
the Bank of Israel decisions are the single most powerful near-term driver of the ILS exchange rate, but four structural forces shape the currency's value over time.
Monetary Policy. the Bank of Israel sets interest rates to manage inflation and support economic growth. When Israel raises interest rates relative to other countries, the ILS tends to strengthen as investors seek higher returns. Rate cuts or expectations of easing typically weaken the currency. Markets price in expected rate changes months in advance, so central bank communication and meeting minutes can move the ILS significantly even before any actual rate change.
Inflation and Purchasing Power. A country with higher inflation than its trading partners sees its real exchange rate erode over time, even if the nominal rate is stable. the Bank of Israel's primary mandate typically includes maintaining price stability, usually targeting annual inflation in the 2–3% range depending on the jurisdiction. When inflation significantly exceeds this target, the currency tends to weaken as the market anticipates either rate hikes or erosion of purchasing power.
Trade and Current Account Balance. Israel's trade with the world creates supply and demand for the ILS. Exporters sell foreign currency to repatriate revenue, supporting the ILS. Importers buy foreign currency to pay overseas suppliers, which weakens it. A structural current account surplus, more exports than imports, generally supports a currency over time, while a deficit puts pressure on it.
Risk Sentiment and Capital Flows. The ILS is sensitive to global risk appetite. When investor confidence falls in emerging or regional markets, capital outflows can weaken the ILS regardless of domestic economic conditions, as investors rotate toward perceived safe-haven assets.
ILS Volatility and Risk Profile
Currency volatility measures how much an exchange rate fluctuates over a given period. Annualized volatility, the standard deviation of daily log returns multiplied by the square root of 252 trading days, is the standard metric used by options traders and risk managers.
Emerging market and smaller economy currencies like the ILS can exhibit higher volatility than G10 pairs, particularly during periods of global risk-off sentiment, capital flow reversals, or country-specific political and economic stress. Investors and travelers alike should account for this volatility when planning significant ILS transactions.
For travelers, short-term volatility means the exchange rate you see today may differ meaningfully from the rate available next week. For businesses with ongoing cross-border transactions, currency risk management tools such as forward contracts or options can hedge against adverse ILS movements.
Sending Money to or from Israel
For international transfers involving ILS, the choice of provider significantly affects the final amount received. The rate shown on LiveRates.io is the mid-market reference rate, the interbank benchmark before any provider markup. Here is a comparison of typical costs:
| Provider Type | Typical Rate Margin | Transfer Fee |
|---|---|---|
| High street bank | 2–4% above mid-market | $10–$40 fixed |
| Airport / hotel exchange | 5–15% above mid-market | Usually none |
| Specialist service (Wise, OFX) | 0.3–1.5% above mid-market | Small fixed or percentage fee |
| Debit card abroad (ATM withdrawal) | 0–2% (network rate) | ATM fee may apply |
For transfers above $1,000, using a specialist service rather than a traditional bank typically saves $20–$80 per transaction. Transfers above $10,000 may qualify for preferential rates through dedicated FX brokers.
Key tip: Compare the total cost including the exchange rate margin and any fixed fees, not just the headline rate. A service advertising zero fees may embed a larger spread in its exchange rate.
Frequently Asked Questions
What is the ISO code for the Israeli Shekel?
The ISO 4217 code for the Israeli Shekel is ILS. This three-letter code is used by banks, financial institutions, payment systems, and forex platforms worldwide to identify the currency in transactions and data feeds.
Which country uses the Israeli Shekel?
The Israeli Shekel is the official currency of Israel in Asia. It serves primarily as the domestic currency of Israel.
Who controls the ILS exchange rate?
the Bank of Israel manages monetary policy and influences the ILS exchange rate through interest rate decisions and, in some cases, direct market intervention.
What is the ILS symbol?
The official currency symbol for the Israeli Shekel is ₪. The ISO 4217 code ILS is used in international financial contexts, forex trading platforms, and cross-border payment systems.
How do I convert ILS to USD?
To convert ILS to U.S. Dollars, use the live converter on LiveRates.io. The exchange rate updates hourly using European Central Bank reference data. You can also view the ILS to USD pair page for a full conversion table, 30-day chart, and historical rate data.
Is the ILS a strong currency?
Currency strength is relative and changes daily based on economic conditions. The best measure is the current exchange rate versus major currencies like USD, EUR, and GBP, which you can find in the rate table at the top of this page. The Israeli Shekel reflects Israel's economic fundamentals including its domestic economic conditions, including trade balances, inflation, and central bank policy.
What is the ILS to USD exchange rate today?
The current ILS to USD exchange rate is available at the top of this page and is updated hourly. You can view the full ILS/USD pair page for a live rate, 30-day chart, volatility statistics, and conversion table.
What is the ILS to EUR exchange rate today?
The current ILS to EUR exchange rate is available on the ILS/EUR pair page. Rates are sourced from the European Central Bank and updated every hour.
How has the ILS performed this year?
Year-to-date performance data for the ILS against major currencies is available on the historical rate pages. Navigate to a specific pair page (such as ILS/USD) and click the historical rates section to view annual highs, lows, and year-over-year changes.
Is the ILS accepted outside of Israel?
The Israeli Shekel is primarily accepted within Israel. For international travel, it is generally advisable to convert ILS to USD, EUR, or the local currency of your destination before arriving, as acceptance outside Israel may be limited.