The Israeli Shekel: A History of Jewish Currency

A Weight Before a Coin

The word “shekel” is older than coinage itself. In Hebrew, shekel derives from the root sh-k-l, meaning “to weigh.” Long before coins existed, the shekel was a unit of weight — approximately 11.4 grams — used throughout the ancient Near East to measure silver and gold in commercial transactions.

When Abraham purchased the Cave of Machpelah from Ephron the Hittite as a burial site for Sarah, he paid “400 shekels of silver, current among merchants” (Genesis 23:16). This was not 400 coins — it was 400 units of weight in silver, weighed out on a balance scale.

The shekel’s biblical prominence made it the natural choice for the name of modern Israel’s currency, creating a symbolic bridge between the ancient and the modern.

From Mandate to Lira

When Israel declared independence in 1948, it initially used the Palestine pound, inherited from the British Mandate. In 1952, the new state introduced its own currency: the Israeli lira (also called the Israeli pound), divided into 1,000 pruta and later into 100 agorot.

The early coins of the State of Israel were rich in symbolism. Designers drew inspiration from ancient Jewish coins — incorporating images of the menorah, grape clusters, palm trees, lyres, and pomegranates that had appeared on Hasmonean and revolt-era coins. The State Emblem — a menorah flanked by olive branches — appeared on coins and bills, connecting the modern state to the Second Temple menorah depicted on the Arch of Titus in Rome.

Early banknotes featured landscapes and agricultural scenes, reflecting the young state’s pioneering ethos. Later series introduced portraits of political and cultural figures, including Theodor Herzl, Chaim Weizmann, Albert Einstein (who was offered the presidency of Israel), and Moshe Sharett.

The First Shekel and Hyperinflation

In 1980, Israel replaced the lira with the shekel at a rate of 10 lira = 1 shekel. The name change was symbolically powerful — reclaiming the ancient unit of currency for the modern state.

But the timing was terrible. Israel was suffering from severe inflation, driven by government spending, oil price shocks, and economic policies that proved unsustainable. Inflation accelerated relentlessly:

• 1979: 78%
• 1980: 133%
• 1983: 191%
• 1984: 445%

By 1985, the economy was approaching hyperinflation. Prices changed daily. Israelis rushed to spend money immediately after receiving it because it lost value by the hour. Menu prices in restaurants were quoted in dollars. The shekel, meant to symbolize sovereignty and strength, had become nearly worthless.

The New Israeli Shekel

On January 1, 1986, the government introduced the New Israeli Shekel (NIS), worth 1,000 old shekels. The currency change was part of the Economic Stabilization Plan of 1985 — a dramatic government intervention that included budget cuts, wage and price freezes, and monetary tightening.

The plan worked. Inflation dropped from hundreds of percent to single digits within two years. The NIS stabilized and gradually strengthened, eventually becoming one of the stronger currencies in the world.

Today, one NIS is divided into 100 agorot (singular: agorah, from the biblical word for a small coin). Coins are minted in denominations of 10 agorot, ½ shekel, 1 shekel, 2 shekels, 5 shekels, and 10 shekels. The 10-shekel coin, bimetallic with a bronze center and nickel ring, is one of the world’s most recognizable coins.

The Poets Series

The current banknote series, introduced between 2014 and 2017, broke with tradition by featuring poets rather than political figures:

• 20 NIS: Rachel Bluwstein (1890-1931), known simply as “Rachel,” whose lyrical Hebrew poetry about the landscape of the Galilee and the Sea of Galilee became beloved across Israeli culture
• 50 NIS: Shaul Tchernichovsky (1875-1943), a poet who brought European literary traditions into Hebrew and celebrated the beauty of the natural world
• 100 NIS: Leah Goldberg (1911-1970), a poet, playwright, and children’s author whose work explored themes of longing, nature, and the immigrant experience
• 200 NIS: Nathan Alterman (1910-1970), a poet and journalist whose work shaped the cultural life of pre-state and early state Israel

The decision to feature poets was deliberate — a statement that Israel’s identity is built on culture and language as much as on politics and military achievement. The inclusion of Rachel and Goldberg marked the first time women appeared on Israeli paper currency.

Coin Designs

Israeli coins continue the tradition of drawing on ancient motifs. Current designs include:

• 10 agorot: A menorah with the date palm, echoing Second Temple coins
• ½ shekel: A lyre, inspired by Bar Kokhba revolt coins
• 1 shekel: A lily, from the coinage of the Persian period
• 2 shekels: Two cornucopias with a pomegranate, from Hasmonean coins
• 5 shekels: A capital from an ancient column
• 10 shekels: A palm tree with seven leaves and two baskets of dates

Special commemorative coins are regularly issued for holidays, anniversaries, and cultural themes, making Israeli numismatics a vibrant field for collectors.

From Weight to Worth

The journey from Abraham weighing silver on a balance to a modern digital economy where shekels move invisibly through banking apps spans the entire arc of Jewish history. The currency tells a story of continuity — ancient symbols on modern coins, biblical names for contemporary money — and of transformation, from agricultural simplicity to technological sophistication.

The shekel, once a measure of silver’s weight, has become a measure of a nation’s economic health, creativity, and determination to connect past and future in every transaction.