Since the economic crisis of the 1980s and the subsequent introduction of the new shekel in 1985, the Bank of Israel and the government of Israel have maintained much more careful and conservative fiscal and monetary policies, and have gradually introduced various market-based economic reforms. In addition, the signing of free trade agreements helped the Israeli economy become more competitive, while heavy investment in its industrial and scientific base allowed the country to take advantage of opportunities associated with the rise of the global knowledge economy, thus greatly increasing exports and opening new markets for its products and services. As a result of these factors, inflation has been relatively low and the country now maintains a positive balance of payments, with a current account surplus equivalent to about 3% of its GDP in 2010. Consequently, its currency has strengthened though less so than an exceptional rise in the Euro and Swiss Franc, rising approximately 20% in value relative to the US dollar from 2001 to 2011, contrasting to weakening in prior decades.

Since 1 January 2003, the new shekel has been a freely convertible currency. Since 7 May 2006, new shekel derivative trading has also been available on the Chicago Mercantile Exchange. This makes the new shekel one of only twenty or so world currencies for which there are widely available currency futures contracts in the foreign exchange market. It is also a currency that can be exchanged by consumers in many parts of the world. On 26 May 2008, CLS Bank International announced that it would settle payment instructions in new shekels, making the currency fully convertible.

In 1985, coins in denominations of 1 agora, 5 agorot, 10 agorot, ₪1⁄2, and ₪1 were introduced. In 1990, ₪5 coins were introduced, followed by ₪10 coins in 1995. Production of 1 agora pieces ceased in 1990, and they were removed from circulation on 1 April 1991. A ₪2 coin was introduced on 9 December 2007. The 5 agorot coin, last minted in 2007, was removed from circulation on 1 January 2008.

In April 2011, it was reported that new coins would be minted that would use less metal and thus lower costs. Counterfeiting would also be harder. The Bank of Israel is considering dropping the word "new" on the planned coins series. If approved, this would be the first replacement of all coins since the introduction of the new shekel coins in September 1985. The coins are minted by the Korea Minting and Security Printing Corporation (KOMSCO).

In 2022, the Bank of Israel announced a new series of coins featuring updated inscriptions for its coins, with "new shekels" replacing "new sheqalim". The 5 and 10 new shekel coins will be the first to feature the new inscriptions, and the 10 agorot and 1⁄2 new shekel coins will feature its unit names rendered in Arabic.

New shekel coin series

Image	Value	Technical parameters				Description			Date of
		Diameter	Thickness	Mass	Composition	Edge	Obverse	Reverse	issue	withdrawal
	1 agora	17 mm	1.2 mm	2 g	Aluminium bronze 92% copper 6% aluminium 2% nickel	Plain	Ancient galley, "Israel" in Hebrew, Arabic and English	Value, date	4 September 1985	1 April 1991
	5 agorot	19.5 mm	1.3 mm	3 g			Replica of a coin from the fourth year of the war of the Jews against Rome depicting a lulav between two etrogim, "Israel" in Hebrew, Arabic and English			1 January 2008
	10 agorot	22 mm	1.5 mm	4 g			Replica of a coin issued by Antigonus II Mattathias with the seven-branched candelabrum, the state emblem, "Israel" in Hebrew, Arabic and English			Current
	₪0.5	26 mm	1.6 mm	6.5 g			Lyre	Value, date, "Israel" in Hebrew, Arabic and English
	₪1	18 mm	1.8 mm	3.5 g	Cupronickel 75% copper 25% nickel (1985–1993) Nickel-plated steel (1994–present)	Plain	Lily, "Yehud" in ancient Hebrew	Value, date, "Israel" in Hebrew, Arabic and English	4 September 1985	Current
	₪2	21.6 mm	2.3 mm	5.7 g	Nickel-plated steel	Segmented (plain and reeded sections)	Two cornucopia		9 December 2007
	₪5	24 mm	2.4 mm	8.2 g	Cupronickel 75% copper 25% nickel	12 sides	Capital of column		2 January 1990
	₪10	23 mm Core: 16 mm	2.2 mm	7 g	Ring: nickel-bonded steel Center: aureate-bonded bronze	Reeded	Palm tree with seven leaves and two baskets with dates, the words "for the redemption of Zion" in ancient and modern Hebrew alphabet		7 February 1995
For table standards, see the coin specification table.

• Note that all dates on Israeli coins are given in the Hebrew calendar and are written in Hebrew numerals.

Beginning on 4 September 1985. banknotes are introduced in denominations of ₪5, ₪10, and ₪50. An ₪1 note followed on 8 May 1986 and the ₪100 note issued on 19 August 1986. On 2 April 1988, the ₪20 note issued and the ₪200 note issued on 16 February 1992 completing the family. The ₪1, ₪5 and ₪10 notes used the same basic designs as the earlier IS 1000, 5000, and 10 000 notes but with the denominations altered.

The ₪1, ₪5 and ₪10 notes were later replaced by coins. A number of these coins, in their first minting, had the images of the individuals on the notes engraved on them.

Image	Value	Dimensions	Colour	Obverse	Reverse	Date of issue	Date of withdrawal
	₪1	76x 138 mm	green	Maimonides	Tiberias where Maimonides is buried; ancient stone lamp	8 May 1986	1995
	₪5		blue	Levi Eshkol	Pipe carrying water, symbolizing the National Water Carrier, fields and barren land in background	4 September 1985	1995
	₪10		orange	Golda Meir	Picture of Golda Meir in the crowd, in front of the Moscow Choral Synagogue, as she arrived in Moscow as Israel's ambassador in 1948	4 September 1985	1995
	₪20		dark gray	Moshe Sharett	The original building of Herzliya Gymnasium, Little Tel Aviv in background	2 April 1988	1 July 2000
	₪50		purple	Shmuel Yosef Agnon	Jerusalem skyline, Eastern European shtetl, the setting of many of Agnon's stories.	4 September 1985	1 July 2000
	₪100		brown	Yitzhak Ben-Zvi	Peki'in Synagogue with carob tree and cave; ancient stone lamp	19 August 1986	1 July 2000
	₪200		red	Zalman Shazar	A girl writing at a desk as a symbol of the Compulsory Education Law which was initiated by Shazar, and Hebrew block letters in background	16 February 1992	1 July 2000
These images are to scale at 0.7 pixel per millimetre. For table standards, see the banknote specification table.

The Second series of bank notes was released in 1999, replacing the first series by 2005. A plan to issue a ₪500 banknote, carrying the portrait of Yitzhak Rabin, was announced shortly after Rabin's assassination in 1995. However, due to low inflation rates, there was no need for such a banknote and it was never issued.

Second series of the new shekel

Image	Value	Dimensions	Colour	Obverse	Reverse	Date of issue
	₪20	71x 138 mm	Green	Moshe Sharett	Jewish volunteers in World War II; a watchtower, commemorating tower and stockade settlements	3 January 1999
	₪20		Green	Moshe Sharett	Jewish volunteers in World War II; a watchtower, commemorating tower and stockade settlements. The additional red text on the polypropylene note reads "60 Years of the State of Israel" in Hebrew in red ink. It was only featured in a 1.8 million limited run close to the noted anniversary and is not present on a majority of notes. (Made of polypropylene, a polymer substrate, which is superior to the regular Series B paper note with a circulation life of a few months only. The polymer note is printed by Orell Füssli Security Printing of Zürich, Switzerland.)	13 April 2008
	₪50		Purple	Shmuel Yosef Agnon	Agnon's notebook, pen and glasses, Jerusalem and the Temple Mount	31 October 1999
	₪100		Brown	Yitzhak Ben-Zvi	Peki'in Synagogue	3 January 1999
	₪200		Red	Zalman Shazar	A street in Safed and text from Shazar's essay about Safed	31 October 1999
	₪500		Blue	Yitzhak Rabin	Part of a speech given by the late Prime Minister shortly before his assassination	Never printed
These images are to scale at 0.7 pixel per millimetre. For table standards, see the banknote specification table.

The committee proposed that the new series would bear the portraits of prominent Hebrew poets, among them Rachel Bluwstein, Shaul Tchernichovsky, Leah Goldberg and Nathan Alterman. In December 2010, it was announced that the series would feature portraits of Menachem Begin, Yitzhak Rabin, Rachel, and Shmuel Yosef Agnon. When Begin's family opposed the decision, the committee's original proposal was readopted.

On 14 November 2012, the Bank of Israel announced that the new series of banknotes is in the final stages of design. The first of the new banknotes to begin circulation was in the ₪50 denomination on 16 September 2014, followed by the ₪200 note on 23 December 2015. The final two denominations, ₪20 and ₪100, were issued on 23 November 2017, completing the "Series C" banknote series.

With the issuing of the third series, the Bank of Israel has adopted the standard English spelling of shekel and plural shekels for its currency. Previously, the Bank had formally used the Hebrew transcriptions of sheqel and sheqalim (from שְׁקָלִים). The new notes also used the Arabic شيكل (šaykal) rather than شيقل (šayqal), which had been used on all banknotes previously.

The banknotes are printed by Orell Füssli Security Printing of Switzerland.

Third Series of the New Shekel
Image	Value	Dimensions	Colour		Description		Date of issue
					Obverse	Reverse
	₪20	129 × 71 mm		Red	Rachel Bluwstein; the poem Kinneret in microprinting; palm tree branches in the background	Vista of the Sea of Galilee shoreline; segment from the poem Perhaps it was nothing…	23 November 2017
	₪50	136 × 71 mm		Green	Shaul Tchernichovsky; the poem Oh, My Land, My Homeland in microprinting; citrus tree and its fruits in the background	Capital of a Corinthian column; segment from the poem I Believe	16 September 2014
	₪100	143 × 71 mm		Orange	Leah Goldberg; the poem In the land of my love the almond tree blossoms in microprinting; almond tree blossoms in the background	A group of gazelles; segment from the poem White days	23 November 2017
	₪200	150 × 71 mm		Blue	Nathan Alterman; the poem Eternal Meeting in microprinting; fall leaves in the background	Moonlit flora; segment from the poem Morning Song	23 December 2015
These images are to scale at 0.7 pixel per millimetre. For table standards, see the banknote specification table.

• Bank of Israel
• Economy of Israel

Wikimedia Commons has media related to Israeli new sheqel.

• Bank of Israel catalogue of Israeli currency since 1948 Archived 17 February 2009 at the Wayback Machine
• Exchange rates since 1948 Archived 3 April 2007 at the Wayback Machine
• American Israel Numismatic Association Archived 15 September 2020 at the Wayback Machine
• Current Sheqel Dollar Rate Archived 12 February 2009 at the Wayback Machine
• Shaar yatzig – Official Rate gadget
• The banknotes of Israel (in English and German)