Shekel shows remarkable resilience after Iran war

The Times of Israel Daily Briefing explores the unexpected resilience of the Israeli shekel amid ongoing regional conflict, particularly following a significant drop below the three shekel per dollar threshold—a rare event in over two decades. Sharon Robel, tech editor, explains that this currency strength is driven by market optimism over a potential end to the war with Iran, a ceasefire in Lebanon, and broader regional stability. This confidence is reflected in inflows from foreign investors, institutional funds, and venture capital, especially in Israel’s thriving tech and defense sectors. While a strong shekel benefits consumers and importers, it harms exporters by making Israeli goods more expensive globally. Meanwhile, the aviation sector remains severely disrupted, with only Israeli airlines like El Al operating due to the absence of foreign carriers. Passengers face exorbitant prices, limited rebooking options, and poor customer service—often relying on automated WhatsApp systems that delay responses. Airlines are under pressure to compensate for wartime losses, and there are growing calls for government intervention and regulation. Despite the challenges, the episode highlights both economic resilience and systemic vulnerabilities in Israel’s infrastructure during prolonged conflict. Key takeaways include: 1) The shekel’s strength reflects market confidence in regional stability, not just economic health; 2) Exporters are suffering due to a strong shekel, creating a need for government support; 3) Israeli airlines are operating under monopoly conditions with little competition, leading to inflated prices and poor service; 4) Passenger rights and airline accountability remain underdeveloped during emergencies; 5) Foreign airlines are hesitant to return due to legal risks and operational uncertainty; 6) The war has accelerated Israel’s global reputation in defense and cyber tech; 7) Long-term economic planning must account for both wartime volatility and post-conflict realities; 8) Consumer protection and regulatory frameworks need urgent modernization to handle future crises.