The old Israeli shekel, then known as the shekel (Hebrew: שקל, formally sheqel, pl. שקלים, Sheqalim; Arabic: شيكل, šēkal, formerly Arabic: شيقل, šēqal until 2014; code ILR), was the currency of Israel between 24 February 1980 and 31 December 1985. It was replaced by the Israeli new shekel at a ratio of 1,000:1 on 1 January 1986. The old shekel was short-lived due to its hyperinflation. The old shekel was subdivided into 100 new agorot (אגורות חדשות). The shekel sign was used, although it was more commonly denominated as S or IS. As of December 2024, this symbol does not exist in Unicode.
The old Israeli shekel replaced the Israeli pound (IL), which had been used until 24 February 1980, at the rate of IS 1 shekel to IL10.
History
Development of a new currency to be known as the shekel (properly, sheqel) was approved by the Israeli Knesset on 4 June 1969. The governors of the Bank of Israel did not consider the time ripe until November 1977, when studies for its implementation began. Prime Minister Menachem Begin and Minister of Finance Simcha Erlich approved a proposal to redenominate the Israeli pound in May 1978; the proposal called for the currency to be exactly similar except for the removal of a zero from the inflated pound and agorot denominations.
The shekel and new agora became legal tender on 22 February 1980 and went into circulation two days later. The official exchange rate at the time of introduction was US$1 = IS 3.89 = IL38.88. Initial denominations were IS 1, IS 5, IS 10, and IS 50, but over the next five years inflation led to another five: IS 100, IS 500, IS 1,000, IS 5,000, and IS 10,000. New coin and bill designs were selected through competitions among graphic designers. Beginning with the IS 500 issue, the size of the notes was standardized (76 mm × 138 mm or 3 in × 5 in), and the denominations were differentiated by color and design. A transparent section was added to discourage counterfeiting, and elements for the blind were added.
Inflationary pressure did not ease. By the end of 1980, the shekel had already lost about half of its value (US$1 = IS 7.55). In 1981, the value of Israeli currency continued to fall, reaching IS 15.60 per U.S. dollar at the end of the year. At the end of 1982, the exchange rate was IS 33.65 = US$1 and was falling still. The following shows the official exchange rate of one U.S. dollar in specific periods of time at the end of the period:
- June 1983: IS 47.52
- December 1983: IS 107.77
- March 1984: IS 153.26
- June 1984: IS 236.40
- September 1984: IS 401.34
- December 1984: IS 638.71
- March 1985: IS 858.50
- June 1985: IS 1262.40
By August 1985, the exchange rate for one U.S. dollar reached IS 1500. The new Israeli shekel replaced the shekel following its hyperinflation and the enactment of the economic stabilization plan of 1985, which brought inflation under control. It became the currency of Israel on 4 September 1985, removing three zeros from the old notes.
The old shekel is no longer in circulation, has been demonetized, and is not exchanged for current legal tender by the Bank of Israel.
Coins
The initial series of coins in 1980 were for the denominations of 1, 5, and 10 new agorot and IS 1⁄2. These preserved the appearance of similar coins under the pound but were worth 10 times as much. The initial runs were struck at foreign mints to preserve the secrecy of the coming currency conversion. The IS 1 coin was introduced in 1981; IS 5 and IS 10 coins in 1982; and IS 50 and IS 100 coins in 1984.
The 1 and 5 new agorot coins were aluminum; the 10 new agorot and IS 1⁄2, IS 1, and IS 100 coins cupronickel; the IS 5 and IS 50 coins an alloy of copper, aluminum, and nickel; and the IS 10 was cupro-aluminum.
- Note that all dates on Israeli coins are given in the Hebrew calendar and are written in Hebrew numerals.
Banknotes
The initial series of banknotes in 1980 were for the denominations of IS 1, IS 5, IS 10, and IS 50 and preserved the appearance of the IL10, IL 50, IL 100, and IL 500 notes that they replaced.
Subsequent issues added the denominations of IS 100, IS 500, IS 1,000, IS 5,000, and IS 10,000.