Smotrich instructs ministry to build task force to help tech firms with shekel surge

Finance Minister Bezalel Smotrich on Wednesday instructed his ministry to create a dedicated task force to help Israel’s technology sector cope with the effects of the shekel’s sharp rise in value, signaling a shift in the government’s approach to the issue, which it has largely remained silent on.

The move comes amid growing concern within the country’s tech industry and after several Israeli companies announced mass layoffs, partly due to the currency spike.

The shekel has traded as high as NIS 2.8 to the dollar, the highest rate since 1993. So far this year, the currency has appreciated by over 4% against the dollar and by 15% over the past year.

According to the Finance Ministry, the team will build support programs and seek ways to limit broader economic repercussions while “respecting the independence” of the Bank of Israel and its monetary policy responsibilities.

The task force will include senior officials from across the ministry, including the budget director, accountant general, chief economist, tax authority chief, capital markets regulator and advisers to the finance minister, the ministry’s statement said.

Earlier Wednesday, Finance Ministry officials met with representatives from major tech companies, who highlighted the dual challenges posed by the shekel’s rise and the transformation of global markets driven by artificial intelligence. Industry leaders warned that currency movements are making it more difficult for exporters and technology firms to remain competitive internationally, the Calcalist business daily reported.

At the meeting, the officials stressed that the government does not intend to intervene directly in the foreign-exchange market or attempt to manipulate the exchange rate, and said that measures to artificially stabilize the shekel could be both difficult and potentially ineffective given the size and liquidity of currency markets.

“It is impossible to maintain an artificial exchange rate forever,” a ministry official told Calcalist. “The market is deep, trading volumes are enormous, and it is not even certain that intervention would be effective.”

“We’re not China,” another official said.

The ministry has said it has also ruled out using government debt as a tool to weaken the shekel, citing concerns that such a move could raise concerns among international credit-rating agencies and potentially affect Israel’s credit standing.

Officials said they are assessing whether the currency’s appreciation reflects speculative trading or genuine economic factors, the report added. Their current assessment is that the shekel is being supported primarily by real capital inflows, including foreign investment, export revenues and activity linked to major sectors such as defense.

The decision to prepare an assistance package marks a notable change in tone from Smotrich, and suggests the government increasingly views the issue as one requiring attention.

It comes after major Israeli tech companies Wix, Rapyd and Amdocs all announced mass layoffs in recent weeks.

Wix, a maker of do-it-yourself website building software, on Thursday confirmed reports that it is cutting as many as 1,000 employees — or about 20 percent of its workforce in Israel and abroad — as the continued strength of the shekel has been driving up costs.

Rapyd, a fintech unicorn, did not disclose any details regarding the scale of the planned layoffs, other than that it will rely on a more focused and professional team. Rapyd employs around 700 people globally, including its Tel Aviv-based workforce.

Amdocs, a software and communications firm, is said to be preparing to reduce its global workforce by 10 percent, which is slated to affect as many as 3,000 employees, including hundreds in Israel, according to Hebrew media reports.

Local tech exporters and manufacturers have long been warning about the increasingly damaging impact of the strong shekel on Israel’s industry and economy, while urging the Bank of Israel and the Finance Ministry to intervene and slow the continued appreciation of the local currency.