September was another good month for remittances sent home by Mexicans working abroad.
The Bank of México reported that remittances totaled US $3.56 billion in September, the highest amount ever recorded for that month and the third highest for any month since records began in 1995.
The only months during which Mexicans working abroad, mainly migrants in the United States, sent more money home were March and August of this year when remittances totaled $4.02 billion and $3.57 billion, respectively.
With the three best months ever for remittances occurring in 2020, it’s no surprise that the influx of such money was the highest ever for a January to September period.
A total of $29.96 billion flowed into Mexico in remittances up until September 30 despite the negative impact the coronavirus pandemic has had on the economy and employment. The amount is 10% higher than the total sent to Mexico in the same period last year.
Gian María Milesi-Ferretti, a deputy director at the International Monetary Fund, described the record remittances as a “ray of sunshine” amid the pandemic gloom.
He said that it showed that migrants always do their best to send money back to their loved ones no matter the circumstances they face.
“Migrants always make a significant effort to help their countries of origin when they are going through difficult episodes. … People sacrifice a lot to keep sending money,” Milesi-Ferretti said.
According to the Bank of México, the average remittance sent home by Mexicans abroad last month was $346, the highest level since October 2008.
Alberto Ramos, chief Latin America economist at Goldman Sachs, said the high average remittance and the exchange rate resulted in recipients getting 22% more in pesos in September than in the same month last year.
The peso fell 9.3% against the US dollar in September.
Some 1.8 million families in Mexico regularly receive remittances from abroad and much of the money is promptly injected into the local economy.
“Remittance flows have been adding support to the current account and to private consumption, particularly for low-income families, who have a high propensity to consume and are the overwhelming recipients of such transfers,” Ramos said.
President López Obrador has described Mexican migrants as “heroes” and praised them in his second annual report for increasing their transfer of money to family members during the difficult economic times.
The Mexican economy has been hit hard by the pandemic and associated restrictions, contracting sharply in both the second and third quarters compared to the same periods last year.
However, there are early signs of recovery – GDP increased 8.6% between July and September compared to the previous three months, according to preliminary data published last Friday.
Source: El Economista (sp)