Remittances increase for sixth straight month, but strong peso blunts the benefit

Remittances to Mexico showed an annual increase for a sixth consecutive month, rising 3% in July compared to a year ago and remaining above US $5 billion for a third straight month, the Bank of Mexico reported. The true gain, however, is offset by the strengthening Mexican currency, which results in fewer pesos pocketed in Mexico per dollar of remittance. In fact, in peso terms, remittances actually fell by 3.7% compared to July 2025, when the peso hit as high as 18.85 to the dollar as compared to a tick or two under 17 today. The arithmetic of the remittance recipient’s quandary is simple. A year ago, a 100-dollar remittance, exchanged at the official rate, would provide something approaching 1,900 pesos to spend. Today that same 100 will yield 1,700 pesos. That’s 200 pesos less to spend for every 100 dollars received from abroad. On average, the increase in dollars sent doesn’t make up for the loss of purchasing power. (Engin Akyurt/Unsplash) Still, the US $5.57 billion that beneficiary households received in July was the second-highest monthly total of 2026, behind only the US $5.62 billion recorded in May. Remittances to Mexico have now surpassed US $36.3 billion through the first seven months of the year, marking a 3.1% rebound compared to the same period in 2025. The increasing total is driven by a rise in the average amount of transactions, rather than an increase in the total number of transactions, After an 11-year growth streak ended with a 4.6% decline in 2025, flows have stabilized and increased in 2026. Unfortunately for those receiving remittances in dollars from abroad, while the peso’s remarkable recent appreciation improves purchasing power for the majority who receive income in pesos, it reduces the value of remittances when converted into pesos. It also makes Mexico more expensive for foreign tourists, and for residents whose income or pensions, including U.S. Social Security, are paid in dollars. Analysis conducted by BBVA research produced an estimate that the purchasing power of remittances fell 8.3% year-on-year in June. That’s a key development, because family remittances represent roughly 4% of GDP, making Mexico the second-largest global recipient of cross-border transfers behind India. The central bank also reported that remittance outflows — money sent abroad from within Mexico — through the first seven months of the year totaled US $731 million, an annual increase of 6.3% over the US $688 million reported in the same period of 2025. Thus, in the first seven months of 2026, the remittance account surplus (cash in minus cash out) was US $35.62 billion, an amount greater than the US $34.56 billion observed from January through July 2025, an annual increase of 3.1%. With reports from El Economista, El Financiero and Expansión