The financial account is a section of the balance of payments that is highly exposed to volatility because of the political and economic relationship between Mexico and the United States. Last year, it brought in $35,873 million, as seen in graph 1. The figure slightly recovered compared to the fall in 2015, yet the downward trend remains.<\/p>\n
Graph 1<\/h3>\n![](\"https:\/\/trends.ufm.edu\/en\/wp-content\/uploads\/2017\/04\/financial-count.png\")
<\/a>Source: Bank of Mexico (Banxico)<\/p><\/div>\n
Direct foreign investment covered 76.6% of the financial account balance.<\/p>\n
76.6% of the financial account balance was covered by direct foreign investment. In other words, $27,526 million entered Mexico in the form productive investments, as shown in graph 2. The figure for 2016 has been the highest of the past three years.<\/p>\n
Graph 2<\/h3>\n![](\"https:\/\/trends.ufm.edu\/en\/wp-content\/uploads\/2017\/04\/foreign-direct-investment.png\")
<\/a>Source: Banxico<\/p><\/div>\n
In 2016, for every foreign investment dollar that entered the Mexican market, there were 2.78 mexican dollars deposited in foreign banks or used to purchase securities abroad. In 2016, the net capital outflow abroad by Mexicans was $22,376 million. Meanwhile, capital inflows of foreign investors that entered Mexico were $8.41 billion for the same year. This is the largest capital outflow in Mexico since 2013. Investors residing in Mexico have increased their overseas deposits fearing the volatility of the Mexican peso; this increase in 2016 doubled that of 2015 as shown in graph 3.<\/p>\n
Graph 3<\/h3>\n![](\"https:\/\/trends.ufm.edu\/en\/wp-content\/uploads\/2017\/04\/foreign-deposits.png\")
<\/a>Source: Banxico<\/p><\/div>\n
On the other hand, securities issued have had an interesting behavior, as shown in graph 4. Those emitted by the private sector have a clear downward trend. The opposite happens with securities emitted by the public sector; their trend is upward and their growth slope increased in 2016.<\/p>\n
Graph 4<\/h3>\n![](\"https:\/\/trends.ufm.edu\/en\/wp-content\/uploads\/2017\/04\/securities-issues.png\")
<\/a>Source: Banxico<\/p><\/div>\n
The rise in securities issued outside the public sector can be explained by the high yield differential of Mexican bonds. This is a strong incentive for investors because in 2016 the annual rise of Banxico\u2019s interbank rate was 3.25%\u2014a figure higher then the growth of US government bond yields. Foreign flows have preferred long-term instruments, but have fallen short on short-term ones.<\/p>\n
In 2016, new investments by foreign invested companies declined. Yet since 2010 the trend has been rising, as shown in graph 5. In 2015, this figure had a significant growth of more than 53% compared to 2014.<\/p>\n
Graph 5<\/h3>\n
<\/a>Source: Bank of Mexico (Banxico)<\/p><\/div>\n
Direct foreign investment covered 76.6% of the financial account balance.<\/p>\n
76.6% of the financial account balance was covered by direct foreign investment. In other words, $27,526 million entered Mexico in the form productive investments, as shown in graph 2. The figure for 2016 has been the highest of the past three years.<\/p>\n
Graph 2<\/h3>\n<\/a>Source: Banxico<\/p><\/div>\n
In 2016, for every foreign investment dollar that entered the Mexican market, there were 2.78 mexican dollars deposited in foreign banks or used to purchase securities abroad. In 2016, the net capital outflow abroad by Mexicans was $22,376 million. Meanwhile, capital inflows of foreign investors that entered Mexico were $8.41 billion for the same year. This is the largest capital outflow in Mexico since 2013. Investors residing in Mexico have increased their overseas deposits fearing the volatility of the Mexican peso; this increase in 2016 doubled that of 2015 as shown in graph 3.<\/p>\n
Graph 3<\/h3>\n<\/a>Source: Banxico<\/p><\/div>\n
On the other hand, securities issued have had an interesting behavior, as shown in graph 4. Those emitted by the private sector have a clear downward trend. The opposite happens with securities emitted by the public sector; their trend is upward and their growth slope increased in 2016.<\/p>\n
Graph 4<\/h3>\n<\/a>Source: Banxico<\/p><\/div>\n
The rise in securities issued outside the public sector can be explained by the high yield differential of Mexican bonds. This is a strong incentive for investors because in 2016 the annual rise of Banxico\u2019s interbank rate was 3.25%\u2014a figure higher then the growth of US government bond yields. Foreign flows have preferred long-term instruments, but have fallen short on short-term ones.<\/p>\n
In 2016, new investments by foreign invested companies declined. Yet since 2010 the trend has been rising, as shown in graph 5. In 2015, this figure had a significant growth of more than 53% compared to 2014.<\/p>\n
Graph 5<\/h3>\n
<\/a>Source: Banxico<\/p><\/div>\n
In 2016, for every foreign investment dollar that entered the Mexican market, there were 2.78 mexican dollars deposited in foreign banks or used to purchase securities abroad. In 2016, the net capital outflow abroad by Mexicans was $22,376 million. Meanwhile, capital inflows of foreign investors that entered Mexico were $8.41 billion for the same year. This is the largest capital outflow in Mexico since 2013. Investors residing in Mexico have increased their overseas deposits fearing the volatility of the Mexican peso; this increase in 2016 doubled that of 2015 as shown in graph 3.<\/p>\n
Graph 3<\/h3>\n<\/a>Source: Banxico<\/p><\/div>\n
On the other hand, securities issued have had an interesting behavior, as shown in graph 4. Those emitted by the private sector have a clear downward trend. The opposite happens with securities emitted by the public sector; their trend is upward and their growth slope increased in 2016.<\/p>\n
Graph 4<\/h3>\n<\/a>Source: Banxico<\/p><\/div>\n
The rise in securities issued outside the public sector can be explained by the high yield differential of Mexican bonds. This is a strong incentive for investors because in 2016 the annual rise of Banxico\u2019s interbank rate was 3.25%\u2014a figure higher then the growth of US government bond yields. Foreign flows have preferred long-term instruments, but have fallen short on short-term ones.<\/p>\n
In 2016, new investments by foreign invested companies declined. Yet since 2010 the trend has been rising, as shown in graph 5. In 2015, this figure had a significant growth of more than 53% compared to 2014.<\/p>\n
Graph 5<\/h3>\n
<\/a>Source: Banxico<\/p><\/div>\n
On the other hand, securities issued have had an interesting behavior, as shown in graph 4. Those emitted by the private sector have a clear downward trend. The opposite happens with securities emitted by the public sector; their trend is upward and their growth slope increased in 2016.<\/p>\n
Graph 4<\/h3>\n<\/a>Source: Banxico<\/p><\/div>\n
The rise in securities issued outside the public sector can be explained by the high yield differential of Mexican bonds. This is a strong incentive for investors because in 2016 the annual rise of Banxico\u2019s interbank rate was 3.25%\u2014a figure higher then the growth of US government bond yields. Foreign flows have preferred long-term instruments, but have fallen short on short-term ones.<\/p>\n
In 2016, new investments by foreign invested companies declined. Yet since 2010 the trend has been rising, as shown in graph 5. In 2015, this figure had a significant growth of more than 53% compared to 2014.<\/p>\n
Graph 5<\/h3>\n
<\/a>Source: Banxico<\/p><\/div>\n
The rise in securities issued outside the public sector can be explained by the high yield differential of Mexican bonds. This is a strong incentive for investors because in 2016 the annual rise of Banxico\u2019s interbank rate was 3.25%\u2014a figure higher then the growth of US government bond yields. Foreign flows have preferred long-term instruments, but have fallen short on short-term ones.<\/p>\n
In 2016, new investments by foreign invested companies declined. Yet since 2010 the trend has been rising, as shown in graph 5. In 2015, this figure had a significant growth of more than 53% compared to 2014.<\/p>\n