MEXICO (Times Media Mexico/El Universal) – Amid the economic crisis caused by the coronavirus, foreigners have begun to take their investments out of the country.
Figures from the Bank of Mexico (Banxico) indicate that government debt in the hands of foreign investors totaled 2.64 trillion pesos as of March 19, the lowest amount since December 5 last year.
The loss of confidence of investors is reflected in the withdrawal of more than 150 billion pesos compared to the $2 trillion $214 billion they had on February 21, its highest level of the year.
In particular, foreigners are withdrawing their investments from Treasury Certificates (Cetes), considered the easiest instruments to exchange for money.
As of March 19, they had 167 billion pesos in these assets, 77 billion less than on January 15, when they had 244 billion, their maximum for the year.
Graphic by El Universal. – Source: Bank of Mexico
In addition to the uncertainty caused by the spread of the coronavirus and the collapse of petropolises, investors have withdrawn their capital because of the slow economic performance and its implications for public finances, said Gerardo Copca, an analyst at MetAnálisis.
“Foreign investors see Pemex’s situation as quite risky for the country’s finances,” he said.
Banxico’s latest figures as of March 19 do not yet include the result of the public consultation of March 21, which was promoted by the government and objected to by businessmen, and which refused to allow Constellation Brands to build a brewery.
Also, they were not included in the March 26 announcement, in which Standard & Poor’s (S&P) downgraded the notes of Mexico and Pemex to “BBB” from “BBB+” with a “negative” perspective.
The announcement was surprising since it was expected that Moody’s and not S&P reduce the country’s grades, but also discounted that after an adjustment to the ratings, the perspective was “stable” and not “negative,” said Copca.
In 2014, Moody’s raised Mexico’s sovereign rating to the “A” category for the first time in its history, which maintains until today, which attracted investors.
In 2010, the country became the only Latin American country to enter the Citigroup Government Bond World Index.
The 150 billion pesos that left the country exceed the almost $113 billion projected for the Instituto de Salud para el Bienestar (Insabi) in 2020.
The figure also doubles the 70 billion pesos allocated to the Jovenes Construyendo el Futuro -Youth Building the Future- program for 2020 and is five times higher than the Sembrando Vida -Sowing Life- plan of more than 28 billion.
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