Alexandra Alper, Reuters, January 2, 2017
Remittances to Mexico posted their biggest jump in over ten years in November in a possible reaction to the U.S. election victory of Donald Trump, who threatened to block the transfers and eroded confidence in the peso currency during the campaign.
Mexicans abroad sent home nearly $2.4 billion in transfers in November, 24.7 percent higher than a year earlier, marking their fastest pace of expansion since March 2006, according to Mexican central bank data on Monday.
President-elect Trump ran a campaign steeped in anti-Mexican rhetoric and threatened to halt transfers from Mexican nationals unless Mexico agreed to pay for the massive wall he has vowed to build on the U.S. southern border to keep out illegal immigrants.
Goldman Sachs economist Alberto Ramos said in a client note the weak peso fanned the remittance surge, noting workers could be “strategically front-loading” transfers to avoid potential taxes or restrictions from the incoming U.S. administration.
The value of the remittances considerably exceeds that of Mexico’s oil exports, Ramos noted.