The portfolio of assets held by the general public contracted for the third month running in August, to NIS 1,201 billion. Figures from the Bank of Israel show that the public's aggregate assets shrank by 0.12% from July, and 1.2% from May of this year, when the aggregate portfolio's value reached its highest value for the year. Compared with August 2001, however, the public's portfolio increased by 4.7%. The chief cause of the decline in August were investment vehicles linked to the consumer price index, which dropped by 0.61% versus July, to NIS 456.7 billion. Bonds linked to foreign currency also contracted, by 1.2% to NIS 178.8 billion. On the other hand, unlinked bonds increased by 1.5% to NIS 363.7 billion. The drop in CPI- and dollar-linked bonds was due to the dollar's fall against the shekel in August, and the decline in inflation expectations after the interest rate hike in July. Since August, the dollar has resumed climbing against the shekel, and is nearing its high of last June. The rates of linked and unlinked bonds have both dropped sharply, leading to yields of 5.8% and 12% respectively. The August figures are therefore unrepresentative of the situation today. The general public's portfolio is widely expected to keep dropping in September because of the steep drop in bond prices. The composition of the public's portfolio did not substantially change in August. About 30.3% of the public's assets are invested in unlinked vehicles, about the same as at the beginning of the year. CPI-linked vehicles comprise 38%, compared with 36% at the beginning of the year. Forex-linked instruments rose to 14.9% in August from 13.5%, at the expense of stocks.