Remittances may be about the hit a record in Mexico, with dollar inflows expected to surpass $60 billion this year, but their purchasing power is dropping quickly due to the strength of the peso and persistent local inflation, according to Banco Base SA.

Mexican workers living abroad sent back home $5.65 billion in July, the central bank said Friday. While that’s 6.6% more than a year ago, putting the country on track for another remittances record in 2023, the appreciation of the local currency together with price increases mean families are buying less with the fewer pesos they are getting.

In fact, calculations by Gabriela Siller, director of economic analysis at Base, shows that if the peso remains stable around 17 per dollar on average and inflation ends the year at 4.6%, the purchasing power of remittances will be reduced by almost 11%, the biggest decline since at least 1996.

Mexico’s peso is the world’s strongest major currency this year, with a 14% appreciation versus the dollar since the start of January.