We are grateful to Patricia Alonso-Gamo, Bas Bakker, Edgar Cartagena, Emilio Fernandez Corugedo, Carlos Fernandez, Manuela Goretti, Metodij Hadzi-Vaskov, Xiomara Hurtado, Sandra Marcelino, Gonzalo Salinas, and Alejandro Werner for helpful comments and discussions. We thank Sandra Marcelino, Pamela Madrid, and Mariana Sans for helping with obtaining country-level data, and CAPDR and Mexico central banks, especially central bank of El Salvador, for timely provision of detailed remittances data. We also thank participants of the Central American Monetary Council, the IMF Surveillance Meeting Seminar, and IMF WHD seminar for useful comments. We are grateful to Sean Thomas and to Soungbe Coquillat for excellent research and editorial assistance. All errors of the paper are of the authors.