Eyal

Well, it would make transactions in dollars harder. For example, most renters pay with $ (that is, they rent for, say, 400$, and pay each month in NIS according to the representative rate at that day) and with out the rate people won't know exactly how much to pay. The central bank hopes this will stop the silly habit of charging $ for things that have nothing to do with imports from the U.S.

ira

There still will be an exchange rate. The market will determine it, the same way it does in other counties. The only difference is that the central bank won't stand behind the rate. It will float and speculators will be able to move the rate in a direction that wil make them money.

Kappa21

and this is another strategy to improve the NIS?!

NorthPole

In many counreis it's central bank which has to keep national currency rate stable (for example it's recommended or even enforced that national bank will intervene on forex market by means of additional sell/buy transactions, when national currency rate drops/rises more than +/- 5% in some period) b/c stabilization of national currency is one of items on the short list of NB responsibilities.
I think Israel will be just like other countries with strong currencies.

entropy

Stanley Fisher says that the shekel is more stable than the dollar... People did big ticket expenses in dollars when the shekel was very unstable. things are different now.

The problem is now that the dollar is so low vs. the shekel that when companies export, they get paid in dollars, but have to pay their employees in shekels. the dollar has fallen 10% the past few months, so its very bad for exporters.