In 2015 the cost of sending remittances to Central America and the Dominican Republic decreased

During 2015 the cost of sending remittances to Central America and the Dominican Republic was reduced.  This result, obtained from the database of Envía CentroAmérica, is a positive one as these countries are major recipients of remittances from abroad.  In fact, four of them -Guatemala, El Salvador, Honduras and the Dominican Republic - stand out among the top 25 emerging economies recipients of international remittances. [1]

The Center for Latin American Monetary Studies (CEMLA), with the financial support of the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB), mantains the database Envía CentroAmérica ( http://www.enviacentroamerica.org,) which provides monthly free information on the cost of sending money from the United States to Costa Rica, El Salvador, Nicaragua, Panama, Guatemala, Honduras and the Dominican Republic. Such database shows the following results:
 

• A decline, during 2015, of the average price of sending remittances from the United States to the countries of Central America and the Dominican Republic as a whole.  Such cost for the remittance of USD 200 dropped from 4.56 percent of the amount sent in 2014 to 4.39 percent in 2015, meanwhile the cost for the remittance of USD 500 declined from 2.72 percent in 2014 to 2.43 percent in 2015.
• In 2015 there were differences in the average price of remittances sent from the United States to the different countries considered.  As a percentage of the amount sent, such price was higher in the remittances to the Dominican Republic and Costa Rica and lower to those sent to El Salvador and Nicaragua, a dollarized country the first one, while in the second one, most providers pay the remittances in U.S. dollars.  In those countries where the remittances are paid in dollars, the consumer is not affected by a cost associated to an exchange rate differential.
• The decrease in the cost of sending remittances from the United Stated was practically shared by the seven countries considered, but there were differences in the corresponding decreases.  The decline of this cost is also noticeable if it is measured as a weighted average considering the amount of the income of remittances of each of those economies.
• The decrease in 2015 in the cost of sending remittances from the United States to the countries of Central America and the Dominican Republic is a continuation of the declining trend registered in previous years.  So, such average cost fell by 1.50 percentage points from 2011 to 2015 for the remittances of USD 200 and in 1.63 percentage points for the remittances of USD 500.