Remittances to Mexico fall for first time in nearly four years in March

Remittances sent to Mexico reached $5.02 billion in March, marking the first year-on-year decline in monthly inflows in almost four years, according to data released on Thursday by Mexico's central bank. A stronger Mexican peso, however, has eroded how far dollars sent from abroad can go back home.

Remittances sent to Mexico reached $5.02 billion in March, marking the first year-on-year decline in monthly inflows in almost four years, according to data released on Thursday by Mexico's central bank. BY THE NUMBERS

Remittances in March were 3.3% below the $5.19 billion recorded in the same month in 2023. CONTEXT

Coming mostly from the United States, remittances grew consistently beginning in May 2020 and notched an annual record of $63.31 billion in 2023. A stronger Mexican peso, however, has eroded how far dollars sent from abroad can go back home. WHY IT'S IMPORTANT

Mexico is the second largest recipient of recipients worldwide, according to the World Bank, and remittances are one of Mexico's most important sources of foreign currency and a source of pride for the government. Remittances have come under some scrutiny amid reporting that showed some drug cartels use them to send illicit earnings back to Mexico.

KEY QUOTE "Despite the moderation at the margin, dollar workers' remittance flows have been adding support to the current account and to private consumption, particularly for low-income families," said Goldman Sachs' chief Latin America economist Alberto Ramos.

Still, "the significant Mexican peso appreciation is eroding the pull of remittances on consumption."

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