So you're heading to Tel Aviv for some world-class hummus, or maybe you're just curious about how a tiny Mediterranean economy manages to stay so stable. Either way, you've probably asked: what is israel currency and why does it look like play money? Honestly, the colorful bills are gorgeous, but there’s some serious economic muscle behind them.
The official money in Israel is the New Israeli Shekel, usually abbreviated as NIS. If you’re looking at a trading screen or booking a flight, you’ll see the international code ILS. Locals just call it the "shekel." It’s been the top dog here since 1985, but the story of how it got here is kinda wild.
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The Drama Behind the New Israeli Shekel
Back in the early 80s, Israel had a massive inflation problem. We're talking 450% a year. Prices changed so fast that shopkeepers were basically re-labeling milk every couple of hours. The government had to do something radical. In September 1985, they introduced the "New" Shekel to replace the old one. They literally just chopped three zeros off the old bills.
1,000 old shekels suddenly became 1 new shekel.
Since then, the Bank of Israel—led currently by Governor Amir Yaron—has been obsessive about keeping things stable. It worked. Today, the shekel is actually considered one of the hardest, most resilient currencies in the world. Even with the geopolitical mess that tends to happen in the Middle East, the ILS usually holds its ground against the US Dollar and the Euro.
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What’s in Your Wallet?
Israeli money is split into 100 agorot (singular: agora). Think of them like cents.
You’ll see coins in these denominations:
- 10 agorot: It’s tiny, copper-colored, and honestly, mostly annoying. You can’t buy much with it.
- ½ shekel: A bigger, silver-ish coin.
- 1 shekel: Simple, silver, and very common.
- 2 shekels: People call this the "shnekel" (a portmanteau of shnayim, meaning two, and shekel).
- 5 shekels: A thick, heavy silver coin.
- 10 shekels: You can't miss this one. It has a gold-colored center and a silver outer ring.
Then you’ve got the banknotes. They are made of a polymer-paper blend that feels a bit like plastic, which makes them hard to tear and even harder to counterfeit.
The current series features poets. Yeah, poets!
The 20 NIS note is red and features Rachel Bluwstein. The 50 NIS is green with Shaul Tchernichovsky. If you have an orange 100 NIS bill, you're looking at Leah Goldberg. Finally, the big boy—the 200 NIS note—is blue and features Nathan Alterman.
Why the Shekel is a Global Powerhouse
Most people don't realize that the israel currency is "free-floating." This basically means its value isn't pegged to the dollar anymore; it goes up and down based on supply and demand. Because Israel has such a massive high-tech sector (think Waze, Mobileye, and endless cybersecurity firms), a lot of foreign investment pours into the country.
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When big US tech companies buy Israeli startups, they have to buy shekels to pay the local engineers. This constant demand keeps the shekel strong. Sometimes it’s too strong, which makes it hard for Israeli exporters to sell their goods abroad.
Digital Shekels are Coming
We're in 2026, and the Bank of Israel is getting very serious about a Digital Shekel. They’ve been running pilots to see if they can create a Central Bank Digital Currency (CBDC). It wouldn't be like Bitcoin—which is volatile and weird—but rather a digital version of the cash in your pocket, backed by the government. The goal is to make payments instant and maybe even work offline.
Practical Tips for Handling Money in Israel
If you're visiting, don't bother bringing a suitcase full of cash. Israel is insanely digital.
- Use Apple/Google Pay: Almost every "shuk" (market) stall and tiny coffee shop takes contactless payments. You can basically survive a whole week in Tel Aviv without ever touching a physical coin.
- Avoid the Airport Exchange: The booths at Ben Gurion Airport will give you a terrible rate. Use an ATM in the city or just pay by card.
- The "Bit" App: If you're hanging out with locals, they’ll probably ask you to "Bit" them money. It’s a local P2P payment app (like Venmo). You need an Israeli bank account to use it, though, so travelers usually have to stick to cash or credit cards.
- Tipping: It's standard to tip 12-15% in restaurants. Most places allow you to add the tip to the credit card bill now, but check first. Some older spots still want cash for the waiter.
The Bottom Line on Israel's Money
The shekel has come a long way from the hyperinflation nightmares of the 1980s. It’s now a symbol of a "Startup Nation" that punches way above its weight class. Whether you're holding a blue 200 NIS bill or tapping your phone at a kiosk in Jerusalem, you're using one of the most sophisticated monetary systems on the planet.
Actionable Next Steps:
- Check the current mid-market rate on a site like XE or Oanda before you land so you know if a local "change" booth is ripping you off.
- Notify your bank that you'll be in Israel; their fraud systems are aggressive and might block your card the second you try to buy a falafel.
- Keep a few 10-shekel coins handy for public restrooms or small street food vendors who still prefer "mazuman" (cash).