Foreign Investors Continue to Exit Mexican Markets for Fifth Consecutive Year

Foreign investors reduced their positions in Mexican markets for the fifth consecutive year in 2024, according to Banco de México data.

Last year alone, $7,567 million (R$45.4 billion) flowed out of the country, a smaller figure compared to the $11,268 million withdrawn in 2023. However, this still exceeded the $5,112 million recorded in 2022, signaling an ongoing trend of disinvestment.

Over the past five years, foreign portfolio outflows have reached $75,835 million. Notably, 68.42% of these withdrawals occurred between 2020 and 2021, reflecting a significant shift in investor preferences.

In 2024, foreign investors increased their holdings in Mexican assets during only two of the last eight quarters. From April to December alone, $16,209 million exited Mexico, including $6,498 million during the final quarter.

Government debt has been a key area of disinvestment. By the end of 2024, foreign investors held just 13% of outstanding Mexican government debt, down from 16% in 2023 and far below the 28% recorded in late 2019.

Quarterly data shows liquidations of $8,079 million and $1,647 million in the first and third quarters of 2024, respectively. Market analysts cite several factors behind this trend.

Gabriela Siller from Banco Base pointed to high interest rate differentials. However, these failed to attract foreign capital due to persistent uncertainties surrounding U.S.-Mexico trade policies and upcoming judicial elections.

Banco de México’s monetary meeting minutes also noted market volatility driven by U.S. electoral uncertainty and idiosyncratic factors. Mexican investors mirrored this behavior by transferring $13,977 million (R$83.9 billion) abroad in 2024—the second consecutive year of such outflows.

While Mexico’s interest rates remain among the most attractive for emerging markets, lingering distrust among both local and foreign investors continues to shape capital flows and market dynamics.

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