Capital Outflow
Categories: International, Trading, Forex
Capital outflow refers to the exodus of assets out of a country, typically because of some kind of political turmoil or economic instability. This is the opposite of the mantra, "in with the good, out with the bad" (or maybe that’s dieting advice).
Regardless, money out of a country = bad. Why? Because if investors are frantically liquidating and/or transferring their assets elsewhere, it means that...Houston, we have a problem. There’s a red flag, money out, no esta bien. The 2019 Trump office played handball with the Chinese via various regulations...China's economy tanked...and money that wanted to flow out of China was stopped by its own government from doing so.
Think of money in this sense: as a kind of popularity vote, financially weighted, for investment opportunity in your own country. And you vote with your mouse.