shekel versus dollar 521.
(photo credit: REUTERS)
Nonresident investors sold about $1 billion of makams, or short-term Bank of
Israel debt, in March, after net investment of $2.4b. in makams in January and
February, the central bank reported Monday.
According to data released by
the bank, there were net sales in March of about $1b. in Israeli corporate bonds
traded abroad, including $800 million from the maturity of a bond of a
pharmaceuticals company and $100m. from the bond of an energy
Despite the drop, foreign investors still hold most of the
makams issued by the Bank of Israel. The heavy sale of short-term debt in March
continues a trend from the last 18 months, in which foreign investment
institutions sold in March, June, September and December, the same months in
which they publish their financial reports.
Meanwhile, Israeli residents
invested a net $20m. in foreign shares traded abroad in March, a significant
drop from previous months, the Bank of Israel reported. The fall comes on the
back of decreased investment flow from institutional investors in February and
March, in addition to net sale by households of about $270m.
made a net $300m. in direct investments abroad in March, mainly in the
manufacturing and service industries. At the same time, Israelis invested a net
$30m. in tradeable bonds abroad, with $175m. by institutional investors offset
by a large quantity of sales by households.
Also on Monday, the central
bank released its report to the public on the discussions between Bank of Israel
Governor Stanley Fischer and his colleagues prior to setting the interest rate
for May, which it kept at its previous level of 3 percent.
announcement, the bank emphasized several points, including: the recent
appreciation of the shekel and recent increases in the interest rate are
expected to moderate inflation in the coming months; indicators of economic
activity support the assessment that rapid expansion of activity and demand
continued in the first quarter; and a large number of central banks, primarily
in emerging- market economies, are raising the benchmark rate and introducing
other contractionary measures.
The issue of rapidly rising housing prices
also featured heavily in the discussions, according to the report.
participant in the discussion noted that the high demand for houses was in
contrast to the moderation of private consumption and the indices of the public
mood, so that this development is exceptional,” the report said. “The
participants discussed the implications of the increase in housing credit on
financial stability, particularly in light of a possible significant drop in
house prices in the future, although the probability of that occurring was
thought to be slight.Globes contributed to this report.