Israel’s Central Bureau of Statistics (CBS) released the data on exchange rates between the New Israeli Shekel NIS and the major convertible foreign currencies of the world in 2022. In 2022, the CBS said, the Israeli Shekel strengthened compared to most currencies used in Israeli foreign trade.
According to the data, the NIS strengthened in comparison with the Japanese Yen by 14.8%, by 8.1% in comparison with the Euro, by 7.1% in comparison with the Pound Sterling and by 0.4% in comparison with the Swiss Franc. In contrast, the Israeli Shekel weakened by in comparison to the US Dollar 3.8%, and by 0.1% in comparison to the Canadian Dollar.
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International exchange rates are an essential indicator of a nation’s wealth and the overall health of its economy. If one nation’s economy grows and strengthens more than another’s, then its currency should strengthen. But most nations do not have convertible currencies. In fact, only a few currencies, such as the US Dollar, the Euro and the British Pound, as fully convertible. This means that they are accepted for exchange anywhere in the world.
Most nations control their currencies and set fixed rates of exchange, so these currencies’ exchange rates do not fluctuate with changes in the international markets and are not accurate indicators of the nation’s wealth or economic stability. But some countries, like Israel, have convertible currencies – there are no limits on the purchase of foreign currencies for NIS – that are not accepted the world over. So, the exchange rates of the NIS against world currencies do give a picture of Israel’s economic health and stability.
In 2022, the average exchange rate of the US Dollar was NIS 3.3595 (4.0% higher than in 2021), the average exchange rate of the Euro was NIS 3.5366 (7.5% lower than in 2021), the average exchange rate of the British Pound Sterling was 4.1506 (6.6% lower than in 2021) and the average exchange rate of the Japanese Yen was 2.5663 (12.9% lower than in 2021).
In 2022, the US Dollar strengthened in comparison with all currencies: by 19.3% in comparison with the Japanese Yen, by 12.4% in comparison with the Euro, by 11.4% in comparison with Pound Sterling, by 4.5% in comparison with the Swiss Franc and by 3.8% in comparison with the Canadian Dollar.
So, the NIS fared much better against the USD than most other currencies. This can be both good and bad. It is good in that it means the economy of Israel was stronger than many other in 2022 and since international prices are set in USD the already high inflation rate seen all over the world was not made worse in Israel by a low Shekel. But had the Shekel devalued more against the Dollar then it might have encouraged more foreign investment. And this could have curbed the trend of layoffs everywhere in Israel Startup Nation during 2022.
