Q REPORTS — (EFE) The dollar’s depreciation, at its lowest level in four years, and the unemployment rate in the United States, one of the highest since 2021, are impacting remittances received by families in Latin America, particularly in Mexico, a country that experienced a nearly 5% drop in remittances in 2025.
Money sent to Mexico decreased by 4.6% to $61.791 billion in 2025, the first year of Donald Trump’s second presidency in the United States, a decline that ended 11 consecutive years of growth, the Bank of Mexico (Banxico) revealed last week.
In contrast, a report by the Inter-American Dialogue estimated that remittances grew by 8%, to $158 billion, in nine countries that account for more than 90% of these flows in the region: Colombia, the Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, and Jamaica, with the exception of Mexico.
But despite the increase, specialists warn of the loss of purchasing power for families receiving remittances in Latin America because the dollar depreciated by 10% in 2025, its worst value since 2017, and reached its lowest level in four years two weeks ago.
The dollar’s weakness is due to a “not very healthy” economic outlook in the United States, which also impacts “the hemispheric economy and the global economy,” warned economist Alejandra Y. Castillo, global advisor to the Public Spend Forum (PSF), in an interview with EFE.
“I send remittances to the Dominican Republic. I have many relatives who send remittances to their loved ones. That dollar isn’t going as far anymore, as we say, in terms of purchasing power,” explained Castillo, who served as Assistant Secretary for Economic Development at the Department of Commerce (2021-2024).
A Cheap Dollar: A Double-Edged Sword
Officials in the Trump Administration have promoted a weak dollar to encourage exports, but the expert sees it as “a double-edged sword” due to its impact on purchasing power in the United States and abroad.
Although “on the one hand, it’s said to benefit exports because they become cheaper,” the specialist points out that, “on the other hand, it makes imports more expensive,” which “raises inflation” in the United States.
“Given the current situation, where the U.S. economy is currently very unpredictable, what it really does is add to that lack of predictability in the market right now,” she said. The Risk of Unemployment in the US
Meanwhile, the US unemployment rate reached 4.4% by the end of 2025, one of its highest levels since 2021, while the consulting firm Gray & Christmas estimated last week that layoffs exceeded 100,000 this January, the highest monthly figure since 2009 and a 118% year-over-year increase.
“When employment in the United States slows, remittances fall sharply, creating immediate pressure on local consumption, retail sales, and tax revenues,” warned Nur Cristiani, Head of Investment Strategy for Latin America at J.P. Morgan, in an analysis.
Although Mexico is the largest recipient of remittances in absolute terms, these transfers represent about 4% of its gross domestic product (GDP), as is the case in Colombia, but in Nicaragua, Honduras, and El Salvador they account for about a quarter of the economy, according to her report.
In addition to the weak dollar and unemployment, President Trump implemented a 1% tax on remittances that went into effect in January, affecting at least 48 million migrants, and for every 1% additional tax, the volume of remittances would fall by about 1.6% in the United States, according to an analysis by the Center for Global Development (CGD).