The dollar–shekel exchange rate has fallen to 3 shekels per dollar—the lowest level since 1995. Over the past 12 months, the dollar has lost approximately 18% of its value against the shekel. For every Israeli exporter, the implication is clear: dollar-denominated revenues are now worth roughly one-fifth less in shekel terms, while wage, energy, and financing costs remain fully shekel-based.
2025 was a record year: total Israeli exports reached $164 billion, a 10% increase. Services exports surpassed $90 billion for the first time, while goods exports totaled approximately $72 billion. But what is the value of a dollar-denominated record when the dollar itself is depreciating? The appreciation of the shekel erodes these achievements in real terms, and beneath the headline figures lie sharp disparities between sectors.
The United States is, and will remain, Israel’s primary strategic partner. Precisely for that reason, we must understand the implications of the data: a special analysis by the Israel Export Institute reveals that approximately 40% of Israel’s total high-tech exports—around $38 billion—are directed to the U.S. market. Since 2020, high-tech exports to the United States have grown by approximately 180%, and this growth alone accounts for about 50% of the total dollar increase in high-tech exports.
The implication is straightforward: when profitability erodes and customers are based in the United States, companies will relocate there. This is already happening. The pace of new startup formation has declined, R&D employment has contracted by 6.5%, and entrepreneurs are incorporating in Delaware. If we fail to provide compelling reasons to stay, today’s impressive export figures will vanish alongside the companies themselves.
Israeli industry has now endured six consecutive years of an exceptionally challenging operating environment: the COVID-19 pandemic, inflation, rising interest rates, the constitutional crisis, the “Swords of Iron” war, “Am KeLavi,” “Roar of the Lion”—and now a strong shekel and U.S. tariffs. Six years without a single period of normalization. Industrial high-tech exports amounted to approximately $25 billion in 2025—still below their 2022 levels. Logistics constraints, airspace closures, reserve duty mobilizations, and shortages of foreign workers have all disproportionately impacted industrial exporters—those who manufacture, employ, and sustain Israel’s periphery.
Behind this erosion are not just charts and exchange rates. There is a factory in the Galilee, an export manager in the south, and an employee called up for yet another round of reserve duty while his company struggles to meet orders and stay afloat.
The Bank of Israel has demonstrated its ability to act when necessary: emergency programs totaling billions of dollars in October 2023, and agreement that tax proceeds from the Wiz transaction would be paid in dollars to prevent a sharp appreciation of the shekel. But the solution cannot come from a single institution.
A comprehensive government response is required: tax policy that accounts for currency appreciation, support for exporters in hedging foreign exchange risk, removal of logistical and regulatory barriers during wartime, incentives to retain R&D centers in Israel, and easing reserve duty burdens for employees in critical industrial sectors. The Ministry of Finance, the Ministry of Economy, the Israel Innovation Authority, and the Bank of Israel must all be brought to the table
And yet—there is also a story of pride. A country generating exits worth $80 billion, startup fundraising totaling $16.5 billion, ranked first in the world in AI talent per capita, and joining the global AI alliance alongside the United States, Japan, South Korea, and Taiwan—this is a nation with much to be proud of. The national challenge is not survival, but translation: converting technological success into broad-based growth that serves the entire economy.
Avi Balashnikov Photo: Israel Export InstituteIn February, I called from these very pages for the establishment of an emergency roundtable on exports. Two months have passed, the exchange rate has dropped by an additional 5%, and the table remains empty. Israeli exporters are not asking for favors—they are asking not to be left alone on the battlefield. At 3 shekels to the dollar, time is running out.
Israeli exports are not asking for concessions. They are asking for the conditions needed to keep fighting, producing, and winning.
Avi Balashnikov is the Chairman of the Israel Export Institute