For weeks, local tech exporters and manufacturers have been warning that the overly strong shekel poses a serious risk to major growth engines of the economy, exerting pressure on the government to act.

Speaking at a Knesset plenum on Wednesday, Finance Minister Bezalel Smotrich announced that a package of assistance measures is expected to be published in the coming days to help Israeli startups and tech firms cope with the repercussions of the strong currency, which harms their profitability and makes business operations in Israel costlier and less viable.

“The strong shekel reflects a strong economy supported by a flow of foreign investments not only in the capital market but also in traditional industries, high-tech, and in defense industries,” said Smotrich. “The problem is the fast pace of the appreciation.”

“Businesses need time to adapt to the strong shekel, which we estimate is the new normal for the Israeli economy,” Smotrich cautioned.

Over the past year, the shekel, which recently reached a 33-year-high, has risen by about 20% against the dollar despite an economy strained by military campaigns in Iran, Lebanon and Gaza. The appreciation has been fueled by growing optimism about an improved geopolitical environment, global dollar weakness, and inflows of foreign capital into local companies.

Meanwhile, the strength of the local currency has been driving up operational costs, forcing tech exporters and startups to make tough decisions about sweeping layoffs, hiring abroad, and moving R&D centers out of Israel, stirring fears about future growth.

Tech contributed to about half of the economy’s growth in 2025, and its share of GDP reached a record high of 18.3%, cementing the sector as a major pillar of the Israeli economy.

Israel’s tech firms, traditional manufacturers, and multinational companies, earn their money chiefly outside Israel and are paid in dollars. But they pay workers’ salaries, overhead costs, taxes and other expenses in shekels, and these have all become more expensive due to the strength of the local currency.

“The norm over the past........

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