With war raging in the Middle East, we want to bring you as many trusted voices on the news as we can. One such voice is the Israeli journalist Amit Segal. He writes a daily newsletter, It’s Noon in Israel, which we’re pleased to publish in The Free Press.
The shekel-U.S. dollar exchange rate has fallen below 3 NIS/USD for the first time in 30 years. It’s been so long that around the last time the shekel was this strong, Benjamin Netanyahu was prime minister, Aryeh Deri was the head of Shas, and the Israel Defense Forces were in southern Lebanon.
The strength of the shekel has its pros and cons. Let’s start with the downsides.
For Israeli exporters, a strong shekel acts as a direct tax on competitiveness. Because companies earning foreign currency must convert it to pay local shekel expenses, a massive chunk of their profit margin simply evaporates in the exchange rate. This is also true on the macro scale: Israel’s sovereign wealth fund generated an impressive 18.4 percent profit in U.S. dollars in 2025. However, because the dollar weakened against the shekel, that return shrank to just 3.8 percent in shekel terms, wiping out NIS 1.1 billion. Returns on other foreign investments face similar contractions.
