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Mexican measures have good impact, remittances higher than oil industry

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Staff writer ▼ | February 22, 2016
Mexico's finance secretary said that economic measures announced this week were already having the intended impact on the national currency.
Luis Videgaray
Mexico   Remittances hit nearly $24.8 billion last year
The peso has strengthened since Wednesday's interventions, "even on (Friday) when the financial markets opened lower," Luis Videgaray said in an interview with Radio Formula.

The currency has risen by "around 0.36 percent" relative to the dollar, meaning that the intervention is causing the peso to "move in the right direction," he added.

The government announced a total of 132.3 billion pesos (some $7 billion) in cuts to federal government spending in 2016, with state-owned oil giant Petroleos Mexicanos accounting for the lion's share.

In addition, the Foreign Exchange Commission, made up of representatives from the Finance Secretariat and the central bank, opted for the immediate suspension of daily dollar auctions that had been carried out for the past several months and instead will sell dollars to banks directly when needed.

In an additional move Wednesday to strengthen the peso, the central bank hiked its overnight lending rate by 50 basis points to 3.75 percent.

Mexico's central bank reported that money sent home by Mexicans overseas hit nearly $24.8 billion last year, overtaking oil revenues for the first time as a source of foreign income.

Remittances were up 4.75 per cent from 2014 when they totalled $23.6 billion, the Bank of Mexico said. They had never before surpassed petroleum since the Bank of Mexico began tracking them in 1995.