Mexico City – Mexico’s central bank, Banxico, has reported a second consecutive monthly decline in remittances sent by its citizens working abroad. In February, these transfers totaled $4.45 billion, a decrease from $4.66 billion in January and $5.2 billion in December.
This downturn follows a record-breaking $64.7 billion in remittances received by Mexico in 2024, which constituted a significant portion of the nation’s income, just under 4% of its gross domestic product. The average amount sent per transaction has also slightly decreased, from $393 last year to $383 in the first two months of 2025.
Economist Gabriela Siller Pagaza of Grupo Financiero BASE in Nuevo Leon has identified several contributing factors to this downward trend. In a statement on X, she pointed to a weakening U.S. labor market, the depreciation of the Mexican peso, and increased apprehension among Mexican immigrants regarding potential deportation.
The economic relationship between the United States and Mexico is closely intertwined, with both nations serving as each other’s primary trading partners. This often means that economic shifts in the U.S. can have a noticeable impact on Mexico.
Analysts suggest that rising inflation in the United States is affecting the financial capacity of Mexican workers to send money home. Alejandro Sandoval, president of Juarez’s Association of Finance Executives, noted that while wages for migrant workers in the U.S. may have increased over the past four years, the higher cost of living, particularly for essential goods and services, is likely reducing the amount of money available for remittances.
Concerns about immigration enforcement are also believed to be playing a role. Reports of potential immigration raids may be causing undocumented workers to avoid work or limit trips to money transfer locations, further impacting the flow of remittances. Groups like America’s Voice suggest this could also lead to labor shortages in certain low-wage industries in the U.S.
Adding to these economic pressures, new regulations in the United States are increasing scrutiny of money transfer services along the Southwest border. The Treasury Department’s Financial Crimes Enforcement Network issued a Geographic Targeting Order effective March 11, requiring businesses in 30 ZIP codes across Texas and California to report currency transactions between $200 and $10,000, including detailed information about the individuals sending the funds.
Customers conducting these transactions will now be required to provide identification, such as a Social Security number for U.S. citizens and legal residents, or a passport for foreign nationals.
NPR has reported that some businesses in South Texas fear these new requirements may make individuals hesitant to provide their information, potentially due to concerns about tracking or future legal entry. These converging economic headwinds and regulatory changes present a potential challenge to the consistent flow of remittances that Mexico has come to rely upon.
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