Remittances from Bay Area to Mexico don't go as far with strong peso

Lauren Martinez Image
Thursday, August 3, 2023
Remittances from Bay Area to Mexico don't go as far with strong peso
The strengthening of the peso while the dollar weakens means every dollar being sent to Mexico is covering less to help friends and family stay afloat.

SAN JOSE, Calif. (KGO) -- Money transfers to Mexico are not going as far as they once used to.

Elvira Armenta, owner of K&J Sweets and Bakery in San Jose, sends her cousin in Mexico $100 a month.

She said she helps a little to at least buy some food.

Right now, one U.S. dollar is worth 17 Mexican pesos.

This means if you sent $500 a year ago, it was worth 10,000 pesos.

Now sending $500 dollars is worth $8,500 pesos.

"Ahorita si yo antes cambiaba $100, hoy tengo que enviar $150 o $200, porque si no alcanza," Armenta said.

Armenta said right now, if she exchanged $100 before, today she would have to send $150 or $200, otherwise it won't be enough.

San Jose native Yacanex Posadas teaches business throughout Santa Clara County.

His business, Yacanex Business Group is coming up on ten years. They've helped 170 small business owners get a start - 80% are undocumented.

"Back home wants more money, your employees want more money, you need more money for yourself so it's - how do we balance that right so this is what they're encountering," Posadas said.

Posadas explained if people are sending the same amount of money, people in Mexico are having to find another source of income.

"It really happened during the pandemic, so they were actually raising their interest rates to combat inflation, so that started the whole peso movement," Posadas said. "We didn't increase our interest rates until recently as you have been seeing we've been so aggressive, but we didn't do anything for a long time so that's the fast imbalance that you're seeing."

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