There is something almost counterintuitive in the current Israeli economic situation.

Israel is facing war with Iran, permanent tension on the Lebanese front, uncertainty in Gaza, regional instability, and political pressure from abroad — and yet the shekel is extremely strong against the dollar. Around 2.90 shekels for one dollar, even lower at certain moments, this rate is one of the strongest levels seen in decades. At first sight, it looks almost impossible to understand. How can a country at war have such a strong currency?

How can investors continue to trust an economy exposed to missiles, mobilisation, diplomatic pressure and regional escalation? Is this an economic miracle? It is not a miracle. It is a signal. The markets are not saying that Israel has no problems. They are not saying that war is good for the economy. They are not saying that the situation is normal. They are saying something more precise: despite the war, Israel still looks financially solid. This is the key point.

Israel is not only a military power. It is also a technological........

© The Times of Israel (Blogs)