The interest rate hike stopped the flight of investments. Overseas financial assets held by Israelis have fallen 2%.
The trend in overseas investments by Israelis reversed in June for the first time in eight months. The causes were the volatility on US stock exchanges and the wide interest rate gap between the shekel and the US dollar, following the Bank of Israel's interest rate hike.
Total financial investments by Israeli residents declined in June for the first time in eight months, dropping 2% to NIS 96 billion. These investments had grown 46% between October 2001 and May 2002, amounting to a further NIS 31 billion invested overseas by Israelis.
Overseas share investments by Israelis continued to fall in June, reaching NIS 30.9 billion. Since 2001, Israeli investments in shares traded overseas, mostly in the US, have dropped by a steep 47%, amounting to NIS 27.5 billion.
Overseas financial investments by Israeli residents include bank deposits and investments in foreign and Israeli bonds and shares.
Published by Globes [online] - www.globes.co.il - on August 6, 2002