September 28, 2012 / 10:58 AM / 6 years ago

Spain loses capital in July for 13th month

MADRID (Reuters) - Spain lost billions of euros in capital for a 13th consecutive month in July amid investor fears about its troubled and shrinking economy, although the rate of outflows slowed from the previous month.

Bank of Spain data showed on Friday that capital outflows, excluding central bank operations, amounted to 15 billion euros ($19.3 billion) in July, down from 56.6 billion euros in June.

A total of 331 billion euros of capital has left the country in the 13 months to end-July, equivalent to around a third of the output of the euro zone’s fourth-largest economy.

The reduced outflow from June to July was mostly due to fewer interbank operations that involved withdrawing money from Spain, one analyst said, adding that this was volatile data and that not too much should be read into it.

Spain’s current account was in surplus by 499.7 million euros in July, the data showed, up from a deficit of 257.2 million euros in June, partly due to inflows of summer tourism revenues.

ECB governor Mario Draghi said in late July that the central bank would do ‘whatever it takes’ to preserve the euro, words that calmed panicked investors and led to an substantial easing in Spain’s borrowing costs.

The government announced more economic reforms and a tough 2013 budget this week in steps seen as preempting the strict terms of any international bailout to reduce the country’s high borrowing costs.

Spain is in talks with Brussels about the terms of a possible aid package that would trigger a European Central Bank bond-buying program.

The Bank of Spain data is not the first to show a lessening of capital outflows in recent months.

Consumers and firms pulled money out of Spanish banks in August at a slower rate than in July, although private sector deposits fell to a more than three-year low, ECB data showed on Thursday.

Reporting By Sonya Dowsett, Additional reporting by Jesus Aguado; editing by Jane Baird

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below