Divergent Views From Israeli Business Leaders on Shekel Rate

Economist says strong shekel irrelevant as tech CEO frets: The dollar-shekel rate works against startups looking to go public

Ori Greenfield, chief economist at Psagot Investment House, with Nir Zohar, the CEO of Wix, at a conference sponsored by TheMarker for Israel's 70th anniversary on Monday, March 19 2018
Tomer Appelbaum

Speakers took differing view on the strong shekel at a conference sponsored by TheMarker for Israel's 70th anniversary on Monday.

Ori Greenfield, chief economist at Psagot Investment House, said reining in the strong shekel was less critical as the Israeli economy shifts from industry to services.

“Service workers, for whom the exchange rate is of no importance, account for 83% of the workforce, Another 6% work in nontrade sectors that also don’t feel the impact of the exchange rate. Only 11% of Israel's workforce is in export industries that are feeling the impact of a strong shekel,” he said.

The dollar strengthened nearly 0.5% against the Israeli currency Monday to a Bank of Israel rate of 3.468. But the shekel has gained some 14% on the dollar over the last five years, with a particular sharp increase since the start of 2017, which has aroused concerns.

Nir Zohar, the CEO of Wix, a maker of website-development tools, told the conference he was concerned about the dollar.

“Israeli high-tech is at a turning point but companies that want to grow and go public and not sell themselves face a very significant set of obstacles. The dollar-shekel rate works against them,” he said.

“Most companies earn dollars and pay salaries in shekels, and as long as the shekel strengthens and the dollar weakens, employees become more expensive. The government doesn’t help — it doesn’t know how to help.”