Mexican immigrants worry as peso drops, hope their dollars help relatives

Money wiring businesses on Cesar Chavez Avenue in Los Angeles' Boyle Heights. As the Mexican peso drops, immigrants in the U.S. hope the dollars they send home will help relatives.
Money wiring businesses on Cesar Chavez Avenue in Los Angeles' Boyle Heights. As the Mexican peso drops, immigrants in the U.S. hope the dollars they send home will help relatives.
Leslie Berestein Rojas/KPCC

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A plunging Mexican peso has Mexican immigrants worried - and hoping the U.S. dollars they send home will give loved ones an economic edge.

On Monday afternoon, people lined up as usual at the money-wiring businesses along Cesar Chavez Avenue in Boyle Heights. It was business as usual, but those sending money to Mexico expressed concern for relatives back home.

"It worries me," said Emelia Morales, 68, who earns money cleaning homes. She sends much of it to her daughter and three granddaughters in the state of Puebla. "The dollar goes up, and we here think 'Great!' But when (the peso) drops, prices in Mexico go up, and things are more expensive."

Morales' two youngest grandchildren are in college in Mexico; she helps her daughter with tuition. 

Morales' loved ones are fortunate to have a relative in the U.S. who sends money. While most people in Mexico will feel the sting, those who receive remittances from the U.S. will remain better off, said David Shirk, a professor at the University of San Diego who studies U.S.-Mexico relations.

“For people who are living in Mexico and maybe receiving remittances, money sent back from friends and family in the U.S. is actually very helpful," Shirk said.

With the dollar trading well against the peso, "if you're getting money back from your husband or a love one in the U.S., you are basically getting a 30 percent raise," Shirk said.

But for those who don't have relatives in the U.S. earning dollars, he said, "it's bad news."

The peso has been declining since late last year, prompted by a drop in oil prices. The currencies of emerging markets have also taken a hit as China's economy slides.

"Decreased international demand for oil, combined with dramatically lower prices for oil have had a significant effect on the demand for Mexican oil and the peso," Shirk said.

He added that confidence in the Mexican economy has also been shaken after a politically tough year for the country's president, Enrique Peña Nieto.

Although dollars will go a longer way in Mexico, some of those who send money home aren't that confidence in their ability to help relatives survive the crisis.

Marta Garcia, who was also wiring money to Mexico on Monday, said she only sends money home to her family when she can.

"I can't send money to them all the time," said Garcia, who works doing home care for seniors, "because I earn very little right now."