Mexican Remittances Face Record Drop Amid Peso Depreciation

Remittances to Mexico fell by 4.6% in September 2023, the largest drop in eleven years, as the Mexican peso's depreciation affected measured dollar values. Remittances are a crucial foreign currency source for Mexico, coming mainly from the U.S., and are vital for low-income families despite concerns over illicit transfers.

In September, remittances sent to Mexico fell sharply by 4.6%, marking the most significant annual downturn in eleven years, according to figures from Mexico's central bank released on Friday. The decline is attributed to the depreciation of the Mexican peso against the dollar.

Mexico remains the world's second-largest recipient of remittances, a vital source of foreign exchange, as highlighted by the World Bank. In September, the remittance flow was recorded at $5.36 billion, down from $5.62 billion in the same period last year.

The peso's depreciation, over 13% against the dollar by the end of September, has influenced the decline, despite remittances increasing by 8.7% locally, as noted by Alberto Ramos of Goldman Sachs. Concerns persist over some funds being used for illicit purposes, impacting low-income families relying on these transfers.