Brazil posted a record portfolio outflow of $22.2 billion in March, official figures on Friday showed, as the coronavirus crisis, oil price collapse and rising domestic political uncertainty prompted investors to flee local markets.
The total comprised a $7.6 billion outflow from equity funds and a $14.6 billion outflow from debt securities, and increased the overall outflow for the first quarter of the year to $24.1 billion, the central bank said.
The spike in volatility across Brazilian financial markets last month, which triggered historic declines in asset prices and widening of spreads, has come back with a vengeance in recent days, pointing to another monthly outflow in April.
"This is a warning signal for the authorities to strengthen the macro framework and move forward with key reforms still trapped in Congress," said Alberto Ramos, head of Latin American research at Goldman Sachs in New York.
The benchmark Bovespa stock index fell 30% in the month, its biggest monthly fall since 1998, and the real currency depreciated 14% against the dollar, its steepest fall since 2011. The $24.1 billion total outflow in the first quarter was in stark contrast to the $10.5 billion inflow in the same period last year.