Remittances sent to Mexico saw their biggest increase in February since records started being collected in 1995, Reuters reported.
Remittances are a major source of the country’s economy for support for low-income families, according to Reuters. In February, remittances to Mexico totaled $3.174 billion, which was an increase from the $2.732 billion from the same time last year. And cash sent back to that area was higher in January, totaling $3.298 billion.
Remittances have hit records for the whole of the past year, with a new high hit in March 2020. That happened as millions of Mexican immigrants living in the U.S. were sending back payments to relatives at home, wanting to help alleviate troubles because of the growing pandemic, Reuters reported.
There was a total of $40.61 billion in remittances sent to Mexico in all of last year, according to Reuters. Going forward this year, remittance flows will likely remain strong.
“Generous wage/income support fiscal transfers in the U.S., a very competitive MXN/USD level, and a deep contraction of activity and employment in Mexico have acted as both push and pull drivers of dollar remittances from the U.S. to Mexico,” Goldman Sachs analyst Alberto Ramos told Reuters.
PYMNTS reported on the staggering amounts of remittances sent to Mexico, including July’s $3.53 billion. Remittances were also increasing to Guatemala, El Salvador and Honduras.
Experts offered reasons for the upward trend, including that the Mexican immigrants sending the money had continued to work throughout the pandemic, with particular highs in the agricultural and construction sectors.
In addition to that, the tighter limits on border crossing made it more of an incentive for workers who usually ferried cash home to find other processes.
Another reason could have been that Mexicans who wouldn’t qualify for unemployment benefits under regular circumstances now had access.
Selected by EFXA