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Media 011116 Remittances

Monday, January 11, 2016

Mexico's Remittances Up - The Return of the Migrant Dollar

Frontera NorteSur

A robust flow of remittances to Mexico has returned from the decline marked after the 2008 world economic crisis. As the New Year turned the corner, the central Bank of Mexico reported that dollars sent home from migrants working abroad totaled US$22.6 billion from January to November 2015, ringing up a 5.44 increase from the similar period in 2014.

The Bank of Mexico's numbers, however, do not include dollars spent in Mexico by migrants during the heavy December spending period, also a time when migrants able to return to their native country – sometimes in organized caravans of "paisanos" – bring in extra cash.

Some analysts predict the total sum of remittances captured in Mexico will hit the US$25 billion mark for 2015. According to La Jornada columnist Enrique Galvan Ochoa, Goldman Sachs and Airpak-Western Union both project Mexico will count US$25 billion in remittances for the just concluded year.

Recovering a very strategic spot in the Mexican economy, migrant remittances in 2015 surpassed direct foreign investment, international tourism and even oil sales as the nation's top source of foreign exchange. For instance, in comparison with the more than US$22.5 billion in remittances registered during the first 11 months of the year, oil sales abroad represented about US$17.7 billion in the same time frame.

Rock-bottom oil prices, less than expected foreign investment in the energy sector, and the plummeting value of the peso in relation to the dollar all work to boost the value of migrant remittances at the beginning of 2016. On this note, the strong dollar benefits households and individuals getting bucks from the United States. In 2015 alone, the value of the Mexican peso dropped by 17 percent.

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Sources: Proceso, January 4, 2016. Article by Juan Carlos Cruz Vargas. La Jornada, December 31, 2015; January 4, 2016.

Reprinted with authorization from Frontera NorteSur, a free, on-line, U.S.-Mexico border news source; translation FNS.  Frontera NorteSur (FNS), Center for Latin American and Border Studies, New Mexico State University, Las Cruces, New Mexico

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