Q: Can I borrow and repay Israeli shekalim (NIS) in the States even if the shekel rises?

A: This question actually relates to merchandise loans (se’ah b’se’ah), not monetary loans, because foreign currency is considered merchandise or a commodity relative to the local currency (C.M. 203:8). Therefore, it is permitted to borrow foreign currency only in the three situations mentioned last week:

1. Yesh lo: If the borrower already has a shekel, he may borrow more. The lender may even sell or give the borrower a shekel, and then lend him additional shekalim (Y.D. 162:2).

2. Yatza hasha’ar: Some authorities suggest that since NIS are readily available on the foreign currency exchange, it should be considered as yatza hasha’ar. However, most disagree, because the exchange rate fluctuates constantly (The Laws of Ribbis, 14:14).

3. Davar Mu’at: The application of davar mu’at to foreign currency is highly questionable, since it is not common to borrow foreign currency from neighbors.

All these halachos apply, conversely, to borrowing and repaying dollars in Israel.  Although the use of the dollar is fairly common there, it is not a legally acknowledged currency and therefore considered a commodity (Bris Yehuda 20:9).