The appreciation of the Mexican peso, the inflation rate and seasonal effects caused that the purchasing power in Mexico of the remittances that countrymen send from the United States fell by 20.74% in Januarywith respect to December 2022, according to a report by Banco Base.
This drop in purchasing power of remittances in a single month is the worst recorded since April 2020.
Gabriela Siller, director of economic analysis at Banco Base, indicated that, For remittance recipients in Mexico, what is important is the purchasing power that these provide them. He indicated that, if the 4,406 million dollars (mdd) are converted with a FIX exchange rate of 18.9863 pesos per dollar and adjusting the series for the inflation observed in the month, it is obtained that remittances fell 3.47% compared to January 2022, the third consecutive month in which remittances lose value in Mexican pesos.
Siller Pagaza, author of the report, estimates that, if remittances close 2023 at 62,909 million dollars, inflation of 5.1% at the end of the year and an average exchange rate of 18.15 pesos per dollarthe purchasing power of remittances would have a loss of 8.01%, the first since 2013 and the largest since 2010.
In January, remittances contracted 17.69% monthly according to original series, settling at 4,406.09 million dollars (mdd), which can be considered negative data since the monthly contraction, which was expected for seasonal reasons, was higher than the historical average. .
The monthly contraction of remittances was explained by a decrease in the number of operations of 13.99% compared to December, standing at 11.76 million. Likewise, the average remittance fell 4.35% per month, settling at 374 dollars, its lowest level since January 2022.
In 2022, remittances to Mexico reached 58,497 million dollars, breaking a new record. The country is the second largest recipient of foreign money remittances in the world, behind only India.
President Andrés Manuel López Obrador has stressed that remittances, which represent close to 4% of Mexico’s gross domestic product (GDP), They benefit some 10 million families in the country.
As of March 3, the exchange rate was at 17.99 pesos per dollar, breaking the psychological barrier of 18 units per greenback.
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