MEXICO CITY (Reuters) – Remittances sent to Mexico, a major support for the country’s economy and low-income families, rose to their highest-ever level for the month of February since records began in 1995, central bank data showed on Monday.
Remittances to Mexico in February totaled $3.174 billion, compared to $2.732 billion during the same month last year.
Cash sent back to family members this past January was slightly higher, at $3.298 billion.
Remittances have been on a record run since last year and reached their all-time monthly high in March 2020, as a growing number of Mexican migrants living in the United States dug deep to send extra money to relatives back home to alleviate the devastating impact of the coronavirus pandemic.
“Solid workers’ 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,” said Goldman Sachs economist Alberto Ramos in a research note on Monday.
Most of Mexico’s remittances are sent by the millions of Mexicans living in the United States and are a pillar of support for Latin America’s second-largest economy, which suffered its steepest contraction in 2020 since the Great Depression of the 1930s.
Remittances sent to Mexico totaled $40.61 billion last year. For January and February 2021, Mexico received a total of $6.47 billion in remittances, up from $5.35 billion the first two months of last year.
Remittance flows are expected to remain strong on the back of the $1.9 trillion US fiscal stimulus package and robust economic growth in the United States.
“Generous wage/income support fiscal transfers in the US, 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 US to Mexico,” Ramos said.