Mexico faces foreign capital flight

Mexico (Prensa Latina) A total of $50 billion of foreign capital invested in shares of Mexican companies and bonds of the federal government's internal debt, fled from the country in recent months, according to experts.

According to data revealed by BBVA Bancomer, the largest financial group that operates in Mexico, this capital flight has been the most significant since the 1995 economic fall.

From May to October, 2008, over $34 billion of shares of national companies that are quoted in the stock exchange fled from Mexico, the equivalent to 30 percent of the foreign capital invested in the country, said a Bancomer bulletin.

Meanwhile, possession of foreign bonds in August, when it was $29 billion, has decreased in over $11 billion, after the bank fund rate reached 8.25 percent, the document said.

The text said the current situation of crisis and distrust threatens to maintain that 'continuous run on the banks.'

The bank entity's bulletin said the flight of capitals in this nation is the main cause of the national currency fall, compared to the US dollar and other foreign currencies.

The capital flight doubles the foreign currency income from remittances reported in 2008, reaching $25.1 billion and exceeding the annual fund rising from crude oil exports, which represented $43.3 billion to the country.