The shekel fell 1.2 percent against the dollar and 0.6% against the basket of foreign currencies in September, the Bank of Israel said Monday, attributing most of the depreciation to residentsâ€™ and nonresidentsâ€™ market activity, as opposed to exchange-rate fluctuations. â€œIn September market activity was markedly affected by the realization by a nonresident of a direct investment of $1.3 billion in a large communications company, reflected by significant purchases of foreign currency,â€ the central bank said, referring to sales of holdings in Cellcom to Nochi Dankner by BellSouth and the Safra family. While the volume of activity was similar to that in each of the previous two months, but higher than at the beginning of the year, long-term capital flows to and from Israel resulted in a net capital outflow for the second month in a row, following significant net inflows from the beginning of the year. Since the beginning of the year, $2.7b. in foreign currency bank credit was taken and $1.8b. was invested abroad by Israeli institutional investors. â€œThe rise in investments abroad is a long term process that has taken place against the background of the implementation of the final stage of the tax reform at the beginning of 2005,â€ the central bank said. Foreign residents have made more than $3b. in direct investments in Israel and over $3.5b. in portfolio investments in Israeli securities (bonds and shares) in the first nine months of the year $2b. of which in shares traded on the Tel Aviv Stock Exchange. Sales of foreign currency via derivatives, carried out by a small number of companies, totaled a â€œsizableâ€ $1b. in September alone, bringing the total to $2.3b. for the first nine months of the year, the cental bank noted.