Mexican in US send $16bn home

Mexican labourers living in the US sent a record $16.6bn (£8.82bn) home last year.

The Bank of Mexico said that remittances grew 24% last year and now represent the country's second-biggest source of income after oil. Better records and greater prosperity of Mexican expatriates in the US are the main reasons behind the increase. About 10 million Mexicans live in the US, where there are 16 million citizens of Mexican origin. Remittances now represent more than 2% of the country's GDP, according to the Bank of Mexico's figures. Last year, there were 50.9 million transactions, with an average value of $327 per remittance, the bank said. According to Standard & Poor's, which has recently upgraded Mexico's sovereign debt rating, the rise in remittances helps protect the Mexican economy against a potential fall in the international oil prices.

The growth in remittances has sparked fierce competition between banks. Bank of America announced last week that it planned to eliminate transfer fees for some customers. Remittance charges are estimated to have dropped by between 50 and 60%, reports from the US Treasury and the Inter-American Development Bank have said. The Inter-American Development Bank estimates that remittances to Latin America and the Caribbean reached $45bn in 2004.