What Currency Is Used in Israel?

What currency is used in Israel?

If you're planning a visit to Israel, investing in its fast-growing tech sector, or doing business with local suppliers, it's essential to understand the country’s currency. This article is for travellers, importers, digital nomads, and anyone dealing with international finance involving Israel. We'll cover the name of Israel's currency, how it works, where it's used, and offer practical tips for handling it confidently.

Israel’s official currency: the Israeli New Shekel (ILS)

The official currency of Israel is the Israeli New Shekel, abbreviated as ILS and symbolised as ₪. Locally, it is commonly referred to as the shekel or NIS (New Israeli Shekel). One shekel is subdivided into 100 agorot (singular: agora).

The currency replaced the old shekel in 1985, following a period of hyperinflation. The “new” shekel remains in use today and is issued and managed by the Bank of Israel, the country’s central bank.

Coins and banknotes in circulation:

• Coins: 10 and 50 agorot, ₪1, ₪2, ₪5, and ₪10

• Banknotes: ₪20, ₪50, ₪100, and ₪200

Banknotes feature prominent Israeli poets and national figures, while the coins depict national symbols and historical imagery.

Who uses the Israeli Shekel?

The shekel is used throughout Israel and in most parts of the Palestinian territories, including areas of the West Bank and Gaza Strip, where it functions as the primary currency. However, the Jordanian dinar and US dollar may also circulate informally in some parts of the West Bank.

If you're travelling to Israel or making payments to Israeli businesses, you’ll need to convert your home currency into shekels. Foreign currencies are not accepted for regular transactions within Israel.

How the Israeli shekel works

Israel operates a free-floating exchange rate system, meaning the shekel's value is determined by global currency markets and supply and demand. The Bank of Israel occasionally intervenes to limit extreme fluctuations, but it does not fix the currency to any other.

As of 2024, exchange rates typically range between:

• ₪3.5 to ₪4.0 per US Dollar

• ₪4.3 to ₪4.8 per British Pound

The shekel is considered a strong and stable currency, reflecting Israel’s diversified economy, robust technology sector, and prudent fiscal policy.

Benefits and considerations of using ILS

Benefits:

• Strong and stable: Backed by a well-managed central bank and a high-tech, export-driven economy.

• Globally recognised: Traded on international forex markets and supported by major banks.

• Convenient for regional use: Accepted throughout Israel and widely used in Palestinian commerce.

Considerations:

• Limited availability abroad: Not all foreign banks or exchange offices stock shekels.

• Cash still important: Some small businesses, taxis, and markets operate on a cash-preferred basis.

• Dual pricing in tourist areas: Prices may be shown in USD or EUR, but final payments are taken in ILS.

Common misconceptions about the shekel

Many assume that Israel, being closely linked with the US and international trade, accepts US dollars in shops or restaurants. This is not the case. While hotels or tour operators may list prices in dollars, all in-person transactions must be completed in Israeli shekels.

Another common confusion is with older coins or currency. Only new shekel coins and notes are legal tender. Old shekels or previous banknote designs are no longer in circulation.

Tips for managing money in Israel

• Withdraw shekels from local ATMs—most accept international cards and offer fair exchange rates.

• Use travel debit or credit cards that waive foreign transaction fees.

• Exchange small amounts of currency at the airport, but do larger conversions in the city for better rates.

• Decline dynamic currency conversion when using your card—always choose to pay in shekels.

• Carry some cash for taxis, public markets, and tips, especially outside Tel Aviv and Jerusalem.

FAQs

Can I use US dollars or euros in Israel?
No. Israel requires payment in shekels for most transactions. While some businesses may show prices in other currencies, payment is made in ILS.

Are credit cards accepted in Israel?
Yes. Visa, Mastercard, and American Express are widely accepted, particularly in cities and tourist destinations.

Is it better to exchange money before travelling or in Israel?
It’s often better to withdraw money from an Israeli ATM using a fee-free travel card. Exchange rates abroad are usually less favourable.

Is tipping expected in Israel?
Yes. A tip of 10–15% is customary in restaurants. Tips for taxis, tour guides, and hotel staff are appreciated but not mandatory.

Real-world example

A UK couple travels to Jerusalem with £500. They use a travel card to withdraw ₪1,800 from an ATM at their hotel, and later exchange an additional £100 at a money changer in the city centre. They use shekels for all transport, meals, and entry fees. At a museum café, they are offered a price in USD, but choose to pay in shekels to avoid poor conversion rates. By using local currency and paying by card only where no fee applies, they stay within budget and avoid unnecessary charges.