Last year, Warren Buffet paid more than $4 billion for the IsraCar Metal Tools company in the Galilee, marking yet another buyout of Israeli businesses by foreigners. Israeli firms now have turned the tables and are gobbling up foreign companies as homegrown firms flex their economic muscle.

The Israeli-based Ness Technologies has agreed to purchase Logos, a Czech information technology provider, for $68 million, as Israeli firms continue an aggressive purchase of foreign companies. Last month, Teva Pharmaceuticals announced it would pay more than $7 billion for the American-based Barr drug company.

Ness's purchase of Logos is the Israel's company's largest acquisition to date. Logos, which employs 570 people, provides IT services and consultation for the Czech financial and telecom industry, whereas Ness focuses on the manufacturing, utilities and public sectors.

The branching out of Israeli firms has helped reverse the trend of the shekel-dollar rate, which has declined significantly over the past three years. The purchase of Barr necessitates Teva's coming up with $2 billion in cash beyond its current reserves, and the deal means it will have to sell a large amount of shekels.

The branching out of Israeli firms has helped reverse the trend of the shekel-dollar rate.

The acquisition provides a lifeline for Bank of Israel Governor Prof. Stanley Fischer, who has been caught in a bind between trying to keep the shekel-dollar rate from falling without having to further raise the interest rate to stave off inflation.

The dollar has fallen from 4.75 shekels to a 12-year-low of 3.20 shekels in the past two years, making the shekel one of the world's strongest currencies when compared with the greenback. The strong shekel has been a boon for consumers buying products from overseas but has forced many importers to lay off employees due to shrinking profits resulting from lower revenues in shekels for dollar-linked merchandise.

Lowering the interest rate was one way of keeping the shekel-dollar rate from falling further because a lower rate encourages investors to put their shekels into a foreign currency that earns a higher interest rate. However, a lower rate also encourages consumption, which can result in the economy overheating and the inflation rate soaring out of control.

Fischer has been forced to raise the interest three times this year to combat inflation. His only other course of action was to meddle in currency trading, a policy which he has opposed but nevertheless adopted several months ago with the surprise announcement that the Bank of Israel would buy millions of dollars every day.

The Teva and Ness purchases have given him much more room to breathe by helping to drive up the shekel-dollar rate from 3.20 to 3.53 in the past three weeks.