Foreign investments in Israeli securities in 2001 plunged 95% to $268 million, according to Bank of Israel data.
The negative 2001 trend continued in December, when investors withdrew $120 million from their Israeli portfolios.
The data reveals that total foreign investments in Israel last year came to $3.9 billion, compared with $11.2 billion in the year 2000, a 65% decrease. Of that sum $2.7 billion was in direct investments, $26 million were in securities (shares, bond and Israeli issues overseas) and other investments in credit and deposits totaled $934 million.
In the more prosperous 2000 foreigners invested $5 billion in Israel.
Israeli residents investments overseas also dropped in 2001, when they totaled $4.1 billion compared with $10.6 billion in 2000. Israeli investments in overseas securities plunged 92% from $2.7 billion in the year 2000 to $203 million in 2001.
The Bank of Israel reports foreign currency activity since the interest rate slash has been predominantly dollar purchases by the public. The data shows foreign currency purchases of $310 million by the public via mutual funds and 3-5 year foreign currency savings accounts. The business sector was more moderate, says the bank, and no credit was redeemed. Foreign residents had purchased $340 million in foreign currency since the interest rate cut, but later sold a great portion of their purchases.