Foreign capital outflows slowed in December, reversing a flight that had been constant since April 2025.
The Institute of International Finance (IIF) reported that in the final month of 2025, foreign investors bought US $1.322 billion worth of Mexican bonds, the most significant surge in debt acquisition by foreign investors among emerging markets tracked by the IIF.
But the December rebound was minimal in contrast to the US $7.0234 billion that was divested from Mexican bonds throughout 2025, subtracting capital from Mexican coffers. It was one of the largest outflows of foreign capital from government instruments in recent years.
Further tempering the good news is that it only reflects the debt market. Final equity market figures are pending, but the IIF has reported that through November 2025, Mexico’s equity market saw a US $5.0046 billion outflow from Mexico.
Grupo Monex analyst Janneth Quiroz Zamora told the newspaper La Jornada that the outflows do not signify a widespread loss of access to markets or a financing crisis. Instead, she described them as a response to the global increase in risk aversion.
“Episodes of financial volatility, geopolitical tensions and doubts about global growth led to a widespread reduction in exposure to emerging markets,” she said.
Quiroz said Mexico still has “relatively solid macroeconomic fundamentals” and referred to the exodus of capital as a portfolio rebalancing.
Foreign investors have sold off US $7B in Mexican government bonds this year
“Some international funds reduced their exposure to Mexican bonds … as part of global rebalancing strategies, taking profits after several years of strong performance by the peso,” she said.
The peso went from 20.88 to the US dollar at the end of 2024 to 18 to the dollar by the end of 2025, a noticeable 16% appreciation.
The IIF also noted that while overall Foreign Direct Investment (FDI) in Mexico reached record highs, new investments declined. They accounted for just 9% of the total, with reinvestments and intra-company transactions making up the bulk of the inflows. Also, nearshoring opportunities had not significantly improved the reshoring process as a percentage of total FDI.
The IIF also projected that Mexico’s economy would fail to reach 1% growth for a second consecutive year in 2026, citing “uncertainty surrounding tariffs, the upcoming US-Mexico-Canada free trade agreement review and domestic institutional fragility.”
With reports from La Jornada and Mexico Business News
