Definition of flight capital in English English dictionary
{i} (Econmics, Finance) money or securities invested abroad because of the fear of risks or political instability of the holder's specific counry or because there are higher returns in the country abroad
(Bilim, İlim) 1. The movement of money from one investment to another in search of greater stability or increased returns.2. The movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns
The departure of funds, whether legally or illegally, from an unstable country to a safe haven The intention is asset protection, rather than tax avoidance or evasion Although such movements are necessarily secretive, there is little doubt but that the U S is the principal recipient of flight capital, followed by Switzerland and the U K
When a collapse of confidence in a country's economic policy leads investors to try to pull their investments out of a country and invest them somewhere else Capital flight is associated with a sharp depreciation in the value of the currency, and poses very difficult economic policy choices
The movement of savings and liquid financial assets from one country to another and from one currency to another Often during financial crises, residents of the crisis country will transfer savings and other liquid assets into dollar-denominated assets, often in the United States This has the effect of putting pressure on the exchange rate and often leads to devaluation and the draining of liquidity out of the crisis country's banking and financial system
The popular idea that invested wealth leaves one country for another While gold and other commodities always move to those markets placing the highest value on them, neither invested wealth (capital goods) nor a nation's irredeemable paper money leaves a country Only their values "flee," usually because investors (capitalists), as a result of new information or fears, have readjusted downward their appraisal of the future values of such investments (securities or monetary units) Investors profit from such a situation only when they correctly anticipate changes in the future market values before they actually occur Capital flight is actually a loss in confidence that results in a drop in values HA 517-20
when those with money in a country find ways to turn it into a hard currency and get it out, either legally or illegally, because they are afraid that if they keep their money in the local currency its value will be eroded by inflation or by the depreciation or devaluation of the currency against others
When people lose confidence in a particular economy or market and withdraw their investment from it, you can refer to a flight of capital from that economy or market. TI has seen its shares suffer because of a flight of capital to telecom and Internet-related businesses