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Remittances sent home by Mexicans living abroad climbed to a record high in 2016 as workers reacted to the shock US election victory of Donald Trump, who has threatened to block such money transfers to pay for his border wall.
Mexicans sent home $2.33bn in December, a 6 per cent increase over the amount transferred during the same period in 2015 and is the highest level for that time of the year on record, according to data from Mexico’s central bank.
The rise brings the total amount of remittances sent in 2016 to an all time high of $26.97bn, surpassing the previous peak of $26.06bn recorded in 2007.
During the presidential campaign, Mr Trump has said he would force Mexico to pay for the construction of his $10bn border wall by cutting off a portion of the money Mexicans send home to their friends and families.
“Mexico must pay for the wall and, until they do, the United States will, among other things: impound all remittance payments derived from illegal wages,” he wrote on his campaign website.
In a two-page memo to The Washington Post last year, Mr Trump also explained that he could try to change a rule under the USA Patriot Act antiterrorism law to cut off the fund flows.
There is good reason why Mr Trump has focused on remittances. The transfers provide an important boost to the Mexican economy, particularly the country’s poorer and less-industrialised southern regions. In 2015, for the first time ever, remittances overtook oil revenues as a the country’s second biggest source of foreign income after foreign direct investment.
Aside from Trump, the rush to send money home has also been bolstered by the peso’s 17 per cent collapse against the dollar last year. The weak peso – the currency sank to a new record low last month – means every dollar goes a bit further back home.
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