Mexico City Mexicans living in the U.S. sent home 12 percent less money in August, the largest drop on record since the Bank of Mexico began tracking remittances 12 years ago, the central bank reported on Wednesday.
After years of record gains, remittances from the U.S. have dipped across Latin America as the U.S. economy slowed and the dollar fell, slashing the real value of money sent home. The falling dollar even slowed emigration to the U.S. from Brazil, where the local currency rose about 7 percent against the dollar in the first eight months of the year.
Mexicans migrants are sending less money home, stranding small towns and neighborhoods that live off the stipends. Remittances will likely continue to fall in the coming months amid the "difficult problems the U.S. economy faces," Mexico's central bank said.
Remittances dropped 12 percent to $1.9 billion, compared to $2.2 billion in August 2007, the bank said. For the first eight months of the year, they dropped 4 percent to $15.5 billion.
A slowing U.S. economy and stepped-up U.S. immigration enforcement, including record deportations and increased border security, are behind the drop.
Remittances are Mexico's second-largest source of foreign income after oil exports. Nearly all of the money comes from the United States, which is home to 98 percent of the at least 11 million Mexicans living abroad.
Mexico's IPC stock index rose 0.9 percent to close at 25,117 Wednesday, shrugging off the bad news on remittances and rising on optimism that the U.S. Congress would approve a plan to bail out struggling U.S. financial institutions.
Mexico has largely weathered the global economic crisis, buoyed by a national housing boom and government-funded infrastructure programs.
But Treasury Secretary Agustin Carstens said this week that Mexico will still be hit as tourism drops and continued volatility deflates oil and other commodity prices. He has lowered his annual growth forecast for Mexico to 2.5 percent.
President Felipe Calderon has boasted that Mexico is no longer economically dependent on its powerful northern neighbor, arguing against the old adage: "If the U.S. economy catches a cold, Mexico gets pneumonia."