Mexico's 'super peso' puts squeeze on US remittances

[Eugene]

Source: Reuters

Mexico's 'super peso' puts squeeze on US remittances

Lizbeth Diaz and Noe Torres
Mon, July 31, 2023 at 8:05 AM EDT

TLAXCALA, Mexico (Reuters) - Mexican mother-of-two Adriana Sanchez frets the $300 or so a month her husband sends from the United States will no longer cover family expenses as a sharp appreciation in the peso currency and nagging inflation crimp her budget.

Mexico now takes in nearly $60 billion a year in remittances, mostly from the United States, making them a pillar of household spending in a country that is now one of the biggest beneficiaries of cash transfers worldwide.

But emergence of the phenomenon known as the "super peso" means those dollars no longer go as far as they did.

Lifted by higher central bank interest rates, as well as the relocation of manufacturing capacity to the region from Asia - a trend known as nearshoring - the peso has risen by over 14% against the dollar this year, outperforming international peers.

-snip-

Read more: https://news.yahoo.com/finance/news/mexicos-super-peso-puts-squeeze-120531975.html

[BlueIn_W_Pa]

1. Sounds like a good thing for Mexico