The new Shekel, which is now valued at 67 cents, went into circulation today. It was approved unanimously by the Knesset yesterday to replace the old Shekel which was worth 0.067 to the Dollar.
Finance Minister Yitzhak Modai said the change was purely technical. He explained that the old Shekel had become unwieldly. Cash registers and computers could not handle the long series of zeroes.
The change does not make the Shekel stronger or Israelis richer. Each new Shekel will cost 1,000 old Shekels. Both old and new Shekels will be accepted until January after which only the new Shekel will be accepted. The change was the first since 1980 when the Shekel was introduced to replace the Israel Pound. Its initial value was 17 cents to the Dollar.
The new Shekel was proposed to keep pace with inflation, currently running at an annual rate of nearly 400 percent. But one Knesset member charged during yesterday’s debate that the new banknotes were illegal. Yair Tsaban of Mapam pointed out that they bore the signature of Avraham Shapiro in his capacity as chairman of the Bank of Israel advisory board. Shapira, an Aguda Israel party MK is also chairman of the Knesset Finance Committee. To avoid conflict of interests, he resigned from his Bank post six months ago.
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