Swiss Investment Chief Predicts Long-Term Strength for Israeli Shekel

Costa Wains, a Swiss investment manager and expert on the Swiss franc's monetary history, warns that Israel is entering a new economic reality characterized by a persistently strong shekel. Speaking from Zurich, Wains explains that Israel currently faces challenges from a significant and ongoing trade surplus, a situation unlikely to change soon. He advises Israel to learn from Switzerland's experience in maintaining a prosperous economy despite a strong currency, emphasizing that central bank interventions can only provide short-term relief.

Wains, who manages assets for Swiss and Israeli high-tech investors and authored a comprehensive book on the Swiss franc's history from 1798 to 2055, highlights the parallels between the two countries despite their differences. Both have similar population sizes and strong education and research systems, but Switzerland's long-standing neutrality, decentralized governance, and stable institutions have supported its currency's strength. He notes that the shekel's recent appreciation against the dollar and other currencies reflects Israel's export success, especially in high-tech and services sectors, signaling a structural economic shift.

Drawing on his extensive research, Wains describes the Swiss franc as one of the world's most successful currencies, having preserved purchasing power better than gold or other assets over centuries. He attributes this to Switzerland's political stability, technocratic institutions, and prudent monetary policies, including aggressive measures like negative interest rates when necessary. He warns that Israel must adopt a similar mindset, accepting a strong shekel as a sign of economic success and adjusting its business models accordingly.

Wains calls for a coordinated approach involving the government, Bank of Israel, and private sector to address this new reality. He stresses that relying solely on central bank interventions is insufficient and that Israel should leverage the advantages of low interest rates and a strong currency to foster sustainable growth. While acknowledging Israel's current security challenges, he urges leadership to take initiative in stabilizing the economy and planning for long-term prosperity under a strong shekel regime.