o reduce the subsidization of the price of the tortilla, the country's principal staple, in 1998. This action has further weakened support for the tight fiscal policy implemented by the national government (Fineren, 1998).
The shock to the Mexican economy delivered by the economic crisis in Brazil in late-1998 was doubly unfortunate in that it hit the Mexican economy at a time when Mexico already was in the midst of a planned slowdown in economic growth and because the country had already been hit by the unexpected and precipitous drop in the world price of oil. As a consequence, in early-1999, Mexican stock prices have dropped more than five-percent on average, the peso have lost more than 25 percent of its exchange value, and interest rates have risen dramatically (Trotta, 1999).
All of these economic shocks have cause a currency flight from Mexico that began in the last-half of 1998 and which continues in early-1999. Deposits by Mexican nationals in American banks increased by 12 percent in 1998, to a total of US$38.9 billion. Deposits by Mexican nationals in American banks in 1995 totaled US$24.6 billion. The economy of Mexico would benefit if the funds deposited by Mexicans in American banks were instead deposited in Mexican banks. The total amount of Mexican deposits in American banks at the end of 1998 was 48.7 times greater than the total amount of funds budgeted by the national government in Mexico for social programs in 1999, which is
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