The U.S. dollar dropped to a seven-year low against the Israeli shekel on Monday, sliding under four shekels for the first time since 2000.

The Bank of Israel's representative exchange rate for the dollar stood at 3.998 shekels at the end of the business day on Monday.

The dollar has been steadily falling in value for about two years. Economists say it reflects the relative strength of the Israeli economy and its low interest rates, but also speculation by foreign currency investors.

Even a scathing government report last week blaming Israeli Prime Minister Ehud Olmert for decision-making shortcomings in last year's inconclusive war in Lebanon has not dampened the rise of the Tel Aviv stock exchange or the steady fall of the dollar.

Analyst Shmuel Berger of the Mirvahim Capital Markets firm told the Haaretz daily that the dollar is not expected to gain strength until the third quarter of the year.