removal of investments, rapid movement of investments out of a market or a country that is seen by investors as unstable
Capital flight, in
economics, occurs when
assets and/or
money rapidly flow out of a
country, due to an economic event that disturbs
investors and causes them to lower their valuation of the assets in that country, or otherwise to lose confidence in its economic strength. This leads to a disappearance of
wealth and is usually accompanied by a sharp drop in the
exchange rate of the affected country (
depreciation in a variable exchange rate regime, or a forced
devaluation in a fixed exchange rate regime).
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