Mexican Peso Slides as Money Transfers From Workers Abroad Fall
By Valerie Rota
Jan. 2 (Bloomberg) -- Mexico’s peso fell as a central bank
report showed dollar flows from immigrant workers abroad declined
The currency lost a fifth of its value last year, posting
its worst decline in over a decade as dollar flows from oil
exports, foreign direct investment and remittances dwindled.
Money transfers from workers abroad fell 11 percent during
November from the same month a year ago, the central bank
Transfers fell 2.6 percent to $21.6 billion in the first 11
months of 2008 from the same period in 2007.
The decline in remittances “shows that one of the most
important sources of inflows to the Mexican economy is
shrinking,” said Bartosz Pawlowski, an emerging-market
strategist at TD Securities Inc. in London. “The situation in
the U.S. labor market has impacted the amount of money that
Mexicans send back home. That’s troublesome.”
The peso depreciated 0.4 percent to 13.7679 per U.S. dollar
at 11:53 a.m. New York time, from 13.7146 yesterday. It slid 20
percent last year, the worst annual decline since 1995.
The plunging U.S. economy has put Mexican laborers out of
work. About 38 percent of Mexican immigrants in the U.S. work in
construction and manufacturing, according to the central bank.
Transfers from abroad are headin
g for the first yearly decline
since the central bank began tracking the data in 1995.
Prices of oil, Mexico’s biggest source of dollar flows, fell
54 percent last year, the first annual decline since 2001.
Foreign direct investment, the country’s second-biggest source of
dollar-based income, fell 15 percent in the first three quarters
of 2008 compared to the same period in 2007, the government said
Mexican bonds rose for a third day, pushing benchmark yields
to a two-week low, on mounting speculation slowing economic
growth will curb inflation
A central bank report next week may show annual inflation
slowed to 6.5 percent by the end of December from 6.56 percent in
the first half of last month, when it surged to a 7 1/2-year
high, according to the median estimate of four economists
surveyed by Bloomberg.
Yields on the government’s benchmark bond fell five basis
points, or 0.05 percentage point, to 8.21 percent, ac
Banco Santander SA. The price on the 10 percent bond due December
2024 rose 0.49 centavo to 115.85 centavos per peso.
Last Updated: January 2, 2009 11:54 EST