Remittances received by Mexican households logged their fourteenth consecutive month of purchasing-power decline in July: in real terms, transfers fell between 6.5% and 7.2% year-over-year, according to analyses by BBVA México and Banamex published by Forbes México, drawing on Banco de México data released on Tuesday, September 1.
The erosion of purchasing power stems not from a drop in remittance volumes but from the exchange rate. The peso appreciated 6.6% against the dollar over the past year while inflation added 3.1%, meaning each dollar sent buys fewer pesos, as El Universal reported. The contrast with July 2025 is direct: the average remittance of 7,438 pesos no longer covers the food basket for three people in urban areas, which INEGI set at 7,637 pesos, whereas a year earlier it did. Currency strength is thus eroding the real income of households that depend on these flows, even as the dollar-denominated amount keeps rising.
Total flows, however, remain high: $5.571 billion entered the country in July, 3% more than a year earlier and the third consecutive month above $5 billion, according to Banxico data cited by Forbes México. The average transfer per household was $426, the highest monthly figure since 1980, El Universal reported. Banorte analysts attribute that amount to an improved labor-market outlook for Mexican migrants in the United States and to extra transfers meant to offset the loss in peso value, according to El Universal. BBVA México calculated that since the peak in real flows, in July 2022, the cumulative decline stands at 24.8%. Valmex Casa de Bolsa summed up the challenge: nominal gains must translate into an effective recovery of purchasing power for recipient households.
Valmex expects remittances to remain at elevated levels with moderate growth, and projects that their impact on household welfare will depend on inflation, the exchange rate, and the labor market in the United States. The next monthly reading from Banco de México will reveal whether that combination can halt the slide in purchasing power.
This article was drafted with the assistance of artificial intelligence from verified sources and reviewed by a human editor before publication.