'Every dollar that we make, we get less'

Brawny shekel threatens to knock out exporters, tech firms dependent on almighty dollar

As exchange rate dives below NIS 3 to the greenback, companies paid in US currency say without government help they will have to cut costs, fire workers and could move elsewhere

For over a century, Hanan Grebelsky’s family-run business has quarried and cut Jerusalem limestone, providing iconic buildings in Israel and abroad — such as New York’s Metropolitan Museum of Art — with chiseled stone facings, floors and more.

Founded in 1923 by Grebelsky’s grandfather Aharon, who immigrated to Israel from the Ukraine, A. Grebelsky & Son has weathered challenges from missile attacks to economic downturns while continuing to churn out blocks of stone for domestic consumption and export.

But the rise of the shekel, which recently hit a 30-year-high against the dollar, has created a “huge strategic concern” that outstrips those other challenges, according to Grebelsky, leaving him and many export-reliant businesses primarily paid in foreign currency struggling to stay afloat.

“[When] the country was at war it was imperative for us to show our customers that we are not stopping the machines,” Grebelsky told The Times of Israel. “But the surge in the shekel, which is out of our hands, is making our products more expensive, and endangers our ability to compete.”

According to Grebelsky, unless the government intervenes, the company will have to begin downsizing or cutting production to make up for the shortfall.

“I’m the third generation, and I really hope that I can at least give my kids the option to continue,” said Grebelsky.

The shekel last week fell below the exchange rate of NIS 3 to the greenback for the first time since 1995, hitting NIS 2.98.

The local currency has appreciated by almost 6 percent against the dollar so far in 2026, and about 20% over the past 12 months, despite an economy strained by military campaigns in Iran, Lebanon and Gaza.

The strengthening is driven by increased purchases of stocks in the Israeli market by local and foreign investors, global dollar weakness, and inflows of foreign investment into Israeli companies. The Tel Aviv-35 stock index has soared more than 21% since the start of the year, and the TA-125 rose about 18%, hugely outperforming the 4.5% advance in the S&P 500 index during the same period.

“There is a general sense, maybe not so much in the last month, but generally over the past year, that Israel’s geopolitical situation has stabilized,” said RISE Israel Institute chief economist Assaf Patir. “Since the ceasefire in Gaza, a lot of anxiety about investing in Israel has subsided somewhat because of the economy’s resilience, and investors are coming back to Israel.”

Exporters, along with many high-tech firms and multinational companies, earn their money chiefly outside of Israel, meaning they are paid in dollars. But they pay workers’ salaries, overhead costs, taxes and other expenses in shekels.

“Every dollar that we make, we get less, as some 75% of our sales are to the US,” said Grebelsky. “At the same time, all of our production and workers are in Israel; all our expenses are in shekels, while other costs in the global economy, including transportation, because of the oil crisis, have become more expensive.”

“We are squeezed between a weak dollar and high shekel expenses,” he lamented.

Grebelsky said that the shekel’s fast appreciation, combined with US President Donald Trump’s imposition of a 15% tariff on Israeli goods imported into the US, pose a serious threat to Israel’s export sector and puts the country’s economic growth at risk.

“The change in the shekel-dollar rate together with the tariffs has added 35% to the price of our products, which is impossible to compensate for and puts in danger our ability to compete in the market,” said Grebelsky.

About 50 employees work out of A. Grebelsky & Son’s factory at the Har Tuv industrial zone near the central city of Beit Shemesh. Offering a variety of stone facings, veneers and tiles made from the tan stone quarried in the Jerusalem hills, the company’s products can be seen from HBO’s California offices to the AIPAC building in Washington, and in Israel at the National Library, the Supreme Court to the Western Wall Plaza.

Israeli exporters and manufacturers have warned that the double-digit appreciation in the shekel over the past year is a “death blow” to their profitability and threatens the closure of factories. Without government action, the continued rise in the local currency will have broader consequences, including reduced investments, layoffs, and a relocation of tech and multinational companies to cheaper markets abroad, they cautioned.

If nothing is done to stem the continued strengthening of the shekel, Israeli exports will fall by NIS 31.5 billion ($10.5 billion) over the coming year, leading to a loss of NIS 3 billion in government tax revenues in 2026, according to estimates by the Israel Manufacturers’ Association.

Exports make up as much as 40% of Israeli economic activity. In the first three months of the year, exports of goods dropped 5%, after declining 7.4% in 2025 in shekel terms, according to Central Bureau of Statistics data. Industrial exports, including mining and quarrying (excluding diamonds), decreased by 9% in the January to March period.

“Any business with exports, both traditional and the tech industry, which generates income in foreign currency and has expenses in shekels, is going to be harmed,” said Patir. Tech companies mature enough to be generating revenue are making less money on sales to customers paying in dollars, while early-stage firms operating on runway costs from foreign investors are not able to stretch that funding as far as they may have planned, he noted.

The tech industry, which contributes about a fifth of the local GDP, accounts for more than 50% of total exports, and its employees generate a third of the country’s tax revenue, according to data from the Israel Innovation Authority.

“The majority of revenues in Israel comes from income of large companies that employ more than 500 employees, which are either multinational corporations, or large Israeli companies like Wix or Monday.com,” said Patir. “Those revenues are immediately translated into taxes, and they are going to be hurt, and reduce government income.”

“When the shekel is strong, the ability of multinationals and local tech companies to hire employees in Israel is going to go down,” said Patir.

There is a consensus among economists and currency traders that the strengthening of the shekel is expected to continue in the short term, especially if the ceasefires with Iran and Lebanon are maintained.

Bank of Israel staying on sidelines

With the government spending and borrowing heavily to pay for the war, it is eager to keep a lid on inflation. A strong shekel helps drive deflationary forces, making imports cheaper, keeping domestic prices lower and reducing credit costs for consumers.

In the past, the Bank of Israel has intervened in the market by buying tens of billions of dollars to moderate the shekel’s gains, or by cutting interest rates, but it has taken neither step this time, allowing the shekel to muscle up to help the government keep its head above water.

“The main thing that the government needs to do is to control spending and increase revenue; that would also give the monetary authority some more leeway to act,” said Patir. “One of the reasons that the Bank of Israel would be reluctant to intervene in the foreign currency market is because the deficit is high, and deficits are inflationary.”

“If the government could commit to a lower deficit, that would put the Bank of Israel in a position to at least consider it,” said Patir.

Dudy Klein, CEO of Israel’s government-owned foreign trade risks insurance company Ashra, said there has been a surge in demand by Israeli exporters for state-guaranteed financing packages that allow them to borrow money rather than raise prices for customers.

“When the shekel is strong, Israeli products become more expensive, and Israeli exporters are facing a lot of pressure from buyers to lower prices, and absorb the loss,” said Klein. “It’s very hard to win a transaction when concentrating on the price, so the competition is transferring to who gives the best credit terms.”

“This is when an Ashra product can be very crucial for an exporter winning a transaction by offering an attractive financial package of credit payments at low interest rates instead of cutting the price,” said Klein.

Ashra was established in 1957 to boost exports from Israel by helping to minimize political and commercial risks of global trade. Eligibility for state-guaranteed insurance and financing is conditional on at least 30% of the export deal having an Israeli component.

“We are Zionists, we want to work in Israel, and we are not looking to take our business abroad, but we are concerned that in the long term, we will lose business because our products will simply become too expensive for our customers to buy and our sales will drop,” said Grebelsky.

“We need government assistance, either to help stem the surge in the shekel or help with expenses, such as municipal arnona [property]  taxes, or assist[ing] exporters in marketing and buying new equipment, which can help us get through this challenging time.

“The government, if they want to keep an industry like the building industry in Israel, they must provide more tools to keep us competitive, and we will fight to make it happen,” said Grebelsky.