Overview of Mexican Investment Exit in Q1 2025
In the first quarter of 2025, a new round of investment exits from the Mexican portfolio market amounted to $541 million, along with an additional $1.869 billion withdrawn by Mexican investors, according to data registered by Banco de México (Banxico).
Portfolio Investment Liquidation
The Mexican portfolio investment sector experienced four consecutive quarters of liquidation, with this quarter’s exit being the most moderate. Meanwhile, Mexican investors also maintained an exodus for four consecutive quarters.
From April 2024 to March 2025, a total of $17.034 billion left the Mexican market, with the peak liquidation of Mexican titles occurring between April and June 2024, when foreign investors divested $8.937 billion from the Mexican market.
Nature of Investments
Banco Base’s economic analysis team explained that these investments are primarily speculative and financial, as investors aim to earn returns without engaging in the operational or strategic decisions of the entities they invest in.
Comparing this quarter’s market exit with the same period in 2024, there is a significant contrast. Between January and March of the previous year, $8.642 billion entered the market. At that time, the interest rate was at its maximum level of 11.25%, and the differential with the US interest rate was at 600 basis points, well above the restrictive historical level of 450 basis points.
Luis Pérez Lezama, Director of Economic Research at Saver, explained that domestically, the persistence of interest rate reductions in Mexico limited the returns offered by Mexico, especially when considering global market uncertainty due to the “Trump factor”.
Banco Base experts emphasized that portfolio investment is sensitive to market condition changes or investor risk perceptions. Known as “floating capital,” these investors can easily enter and exit the country.
Mexican Investors’ Exodus
Local entrepreneurs continued to move their capital out of Mexico during Q1 2025, extending the exodus initiated in April 2024, according to Banxico data.
In Q1 2025, Mexican investors transferred $1.869 billion abroad, marking the fourth consecutive quarter of divestment.
The outflow of productive Mexican capital in Q1 2025 contrasts with the return of local investments during the same period in 2024, which totaled $965 million.
Key Questions and Answers
- What is the total amount of investment exits from the Mexican market in Q1 2025? $541 million from the portfolio market and an additional $1.869 billion by Mexican investors.
- What is the nature of these portfolio investments? Primarily speculative and financial, with investors seeking returns without operational or strategic involvement.
- Why are Mexican investors exiting the market? The persistence of interest rate reductions in Mexico, along with global market uncertainty due to factors like the “Trump effect,” have limited returns and encouraged capital flight.
- How do these investment exits compare to the same period in 2024? In Q1 2024, $8.642 billion entered the market, contrasting with the Q1 2025 exits.
