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Remittances from Mexican workers abroad hit new record

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Mexicans living the United States and elsewhere sent home a record amount of cash in April.

Data released Friday indicated that remittances, one of Mexico’s top sources of foreign currency, rose nearly 18 percent in April to US$2.72 billion.

That is the most money flowing into Mexico from Mexican nationals abroad since 1995, according to central bank data.

Analysts said the increase was likely fueled in part by a nearly 4 percent slump in the peso during the second half of April. Migrants tend to wait for a favorable exchange rate so their dollars buy more pesos back home.

An American dollar buys nearly 20 pesos right now.

The peso sank in May to a 15-month low and a tight U.S. labor market should support “solid” remittances in the near term, according to a Goldman Sachs report.

On Friday, the U.S. Labor Department said the unemployment rate was at an 18-year low, potentially creating a labor market squeeze with higher wages.

The Trump administration is examining ways employers might hire more immigrants on a temporary basis, White House economic adviser Larry Kudlow said on Friday.

A Banorte analyst said that the hard-line U.S. migration policy has likely been driving up remittances as workers may fear deportation. That compels them to send more savings back home while they can.

Source: Reuters

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