The Palestine pound was introduced by the British in 1927 to replace the Egyptian pound and British sterling as the official currency. The banknotes and coins had inscriptions in Hebrew, Arabic and English. Bracketed beside the word Palestine in Hebrew were the letters ‘aleph’ and ‘yud’ for Eretz Yisrael (Land of Israel), which angered members of the Arab population who threatened to boycott the new currency.
These banknotes remained legal tender until August 1948 when they were replaced by the new country’s “Palestine Pounds” (which were printed in New York before the new country was named). The term “Israeli Pound,” introduced in 1952, was changed to shekels in 1980—and converted to new shekels in 1985.
The new Israeli shekel is also the dominant currency in the West Bank and the Gaza Strip. It was established as the official currency as part of the Oslo Accords between Israel and the Palestinian Authority.
