In August, the second best month in remittances in history

In August 2024, remittance income amounted to 6,087 million dollars, which represented an annual increase of 9.3 percent compared to 5,568 million dollars reported in the same period of 2023, data from the Bank of Mexico (BdeM) reveal. ).

The second best mark of the year since there are records, only surpassed by the 6,206 million dollars of last June, analysts agree, is the result of the strengthening of the dollar against the peso, which encouraged compatriots living in the United States to send more money.

Between January and August, the foreign currency that has entered the country through remittances reached an unprecedented level for a similar period of 43 thousand 27 million dollars, which is equivalent to an annual increase of 3.7 percent.

In the last 12 months (September 2023-August 2024), according to information from the BdeM, the accumulated flow of remittance income was 64,872 million dollars, an amount higher than the amount reported in the previous July of 64,353 million dollars ( August 2023-July 2024).

Citibanamex analysts highlighted that in August remittances saw a recovery, given that they were 10.8 percent higher than the 5,613 million dollars registered the previous month; However, the deceleration still prevails, given that in the accumulated growth of the year a growth of 3.7 percent is observed, below the 8.7 percent of the same period of the previous year, being the lowest since 2013. The moderation in the growth of Remittances, the financial institution noted, come hand in hand with the cooling of the labor market in the United States.

The effect of the exchange rate

In a report, BBVA México explained that in August there was a depreciation of the Mexican peso of 5.4 percent, which caused that in real terms, converted into pesos and discounting the inflation factor, remittances that month showed a growth of 17 percent. compared to the same month of the previous year, which represents a very significant increase for the pockets of the households that receive these resources.

In this sense, he explained that a large part of the remittances that arrive in Mexico come from the United States, where almost 95 percent of the Mexican migrant population in the world resides, therefore, fluctuations in the exchange rate of the peso against the dollar They impact the decisions of compatriots about the amount to send to the country.

The Mexican population abroad, not knowing whether the increases in the exchange rate are structural or temporary, take advantage of the moment to slightly increase their shipments in dollars so that they translate into a greater relative amount of pesos when collected in Mexicoexplained the financial institution.

The average monthly amount of remittances during 2024 has been around 5,400 dollars, up from 5,300 in 2023.

Monex analysts described surprising the increase in remittances in August; However, it is explained by a strong rebound in the number of registered operations, which reached 15 million, with an average shipment of 407 dollars and a slight increase of one percent in the average value of currencies.

Remittances have been a key factor for the dynamism of domestic consumption. Despite the slow start to the year in the levels of income from remittances, in the last three months they have reached maximum levels. This performance could be explained by the solid progress of the United States economy, highlighting the slowdown in inflation and, to a lesser extent, the modest progress in the labor market.he pointed out.

Employment figures in said country will continue to be a relevant factor for shipments, since they represent an important part of the income for the families of the workers who receive the resources. Another variable to consider, specialists agree, is the depreciation of the local currency, which boosts the purchasing power of remittances for families.