Title: MEXICO IN LATIN AMERICAN INTERNATIONAL FINANCE: CAPITAL FLOWS, EXCHANGE-RATE INTERDEPENDENCE, AND REGIONAL INTEGRATION UNDER GLOBAL VOLATILITY

Authors: Alberto Merced Castro Valencia, Fabiola Guadalupe Arriaga Lopez And Celina Beltran Hernandez

Abstract: This article analyses Mexico’s position in international finance and its relationship with Latin America through a comparative macro-financial lens. The study starts from a central problem: although Mexico is one of the largest and most financially sophisticated economies in the region, its external financial structure is deeply conditioned by global markets and the United States, while its links with Latin America remain important but uneven, partial, and often mediated by broader global shocks. The objective is to explain how Mexico’s balance-of-payments structure, capital-flow composition, exchange-rate dynamics, and regional financial ties shape its role with in Latin American finance. Methodologically, the article adopts a qualitative-quantitative research design based on structured secondary-data analysis and critical literature review. It combines official sources from Banco de México, the International Monetary Fund, the World Bank, the Bank for International Settlements, the Economic Commission for Latin America and the Caribbean, and the OECD with academic literature on financial integration, capital mobility, foreign direct investment, and regional macro-financial spillovers. The article’s analytical focus is on the interaction between stable financing channels, such as foreign direct investment, and more volatile channels, such as portfolio and banking flows, as well as on the asymmetrical relationship between Mexico’s North American financial anchoring and its Latin American regional relevance. The derived contribution of the study is twofold: first, it argues that Mexico should be understood as a bridge economy rather than a purely regional financial anchor; second, it proposes an analytical framework that links international finance theory with Latin American structural asymmetries. The findings suggest that Mexico’s regional importance lies less in full financial integration with Latin America than in its role as a benchmark, transmitter, and potential institutional hub for selective regional financial coordination.

Keywords: International finance, Mexico, Latin America, capital flows, exchange rates, financial integration.

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