Posted on October 1, 2008

US Mexicans Send Less Money Home

BBC News, October 1, 2008

The slowing of the US economy has seen the amount of money that Mexicans are sending home continue to drop sharply, official figures show.

Remittances suffered their sharpest fall on record, down by 12% in August compared to the same month last year, according to Mexico’s central bank.

This money is the country’s second largest legal source of foreign income after oil revenues.

More than 20% of Mexican migrants work in the troubled construction industry.

Migrants have sent home $15.5bn (£8.7bn) in the first eight months of the year—4% below the same period in 2007, the figures said. This included $1.9bn in August, down from $2.2bn a year earlier.

Exchange rate

The US is home to 98% of Mexicans living abroad, and the drop-off has caused hardship in small towns that depend on the income.

Besides the slowing economy, increased immigration enforcement—including deportation and greater border controls—have been blamed.

Families in Mexico who depend on the income sent to them from workers abroad have also suffered from the unfavourable exchange rate of the Mexican peso against the US dollar.

And Mexican Treasury Secretary Augustin Carstens warned that falling tourism and lower oil prices would also dent the nation’s coffers.

Flows of remittances from the US to Mexico are among the largest flows among all migrant workers worldwide.

Overall, remittances from workers to their home countries make up an estimated $300bn, three times the level of foreign aid.