In the World Bank’s series, personal remittances were about 30% of GDP in Honduras in 2025, 27.5% in El Salvador and 21% in Guatemala. For comparison, the Dominican Republic sits near 10%. Few places on earth depend so heavily on money sent by people who live somewhere else.
These three countries are neighbours, send most of their migrants to the same place, and run three different monetary arrangements. That makes them a tidy teaching case. It also means a sender who treats them as interchangeable will make avoidable mistakes.
A record year, and why people say it happened
Central-bank numbers for 2025 are striking. Guatemala’s central bank reported US$25.53 billion, up 18.7% from US$21.51 billion in 2024. El Salvador’s central bank reported US$9.99 billion, up 17.8%, of which the United States supplied about 92%. In Honduras, the central bank’s weekly figures reached about US$11.07 billion by 27 November, roughly 25.7% above the same period of 2024, with the bank saying about 98 of every 100 dollars came from the US.
Why the surge? Some commentary in the regional press links it to fear of deportation: migrants sending larger sums to build a cushion in case conditions worsen. That is an interpretation, not a measured fact. The Honduran central bank itself attributed its rise mainly to higher sending by Hondurans living in the US. The data show how much arrived. They do not show why.
For a sender the lesson is smaller and more practical. Big lump sums behave differently from small regular ones. They hit limits, trigger identity questions, and make the exchange-rate margin matter more in dollars. We come to each below.
El Salvador: when there is no exchange rate
El Salvador uses the US dollar. That is the headline of the country’s monetary system and, from a sender’s point of view, it abolishes a whole category of cost. A dollar sent from Texas arrives as a dollar. There is no conversion, so there is no margin hiding in the rate. The only price is the fee.
Two things to keep straight. First, “no exchange rate” does not mean “no price”. Providers still charge fees, and some add them in other ways. Second, bitcoin. In early 2025, to secure a US$1.4 billion IMF credit, El Salvador’s legislature amended its bitcoin law so that businesses were no longer obliged to accept it. Dollars remain the working money. Reports on how much remittance traffic uses crypto wallets point to a small share: the central bank’s breakdown for October 2025 showed US$5.7 million through crypto wallets, against US$469.9 million through remittance companies and US$342.5 million through banks out of US$852 million in the month. Tiny, in other words. We are not recommending or discouraging anything here, only noting that for a family in San Salvador the standard options are the ones that dominate.
Guatemala and Honduras: two ways to manage a currency
Guatemala’s central bank describes its regime as a flexible exchange rate. It says it has no commitment to exchange quetzales for dollars, takes part in the institutional foreign-exchange market, and publishes a daily reference rate used for tax and legal purposes. In practice the rate moves day to day, and the central bank can still take part in the market.
Honduras works differently. The IMF’s 2024 staff report describes a “crawling band” regime run by the central bank, with the BCH foreign-exchange auction reinstated in April 2023 and, by its account, the lempira allowed to crawl faster after September 2024. The report does not give the band’s width, so we won’t either. What matters to a sender is the pattern: the rate tends to move gradually and in one direction at a time, not jump about hour by hour, but it does move, and over months the difference can be real. Our guide to pegged versus floating currencies sets out the spectrum these systems sit on.
You can see current levels on our USD to GTQ and USD to HNL pages. Rates refreshed hourly.
What the cost looks like
The World Bank’s Remittance Prices Worldwide database, for the third quarter of 2025, shows sending $200 from the US to Guatemala averaged a fee of $6.53, an exchange-rate margin of 0.92% and a total cost of 4.19%. We could not retrieve the equivalent pages for El Salvador or Honduras, so we give no figure for them. These are survey averages, not quotes.
Here is the Guatemalan arithmetic, using an illustrative rate of 7.5 quetzales to the dollar chosen for round numbers (it is not today’s rate). At the mid-market rate $200 is Q1,500. With a 0.92% margin the family receives about Q1,486, which is $1.84 of value given up. Add the $6.53 fee and the total is $8.37, or 4.19% of the amount sent.
| Illustrative $200 to Guatemala | Amount |
|---|---|
| Value at mid-market (7.5 assumed) | Q1,500.00 |
| Received after a 0.92% margin | Q1,486.20 |
| Margin cost in dollars | $1.84 |
| Fee | $6.53 |
| Total cost | $8.37 (4.19%) |
See how much the fee dominates. On a small transfer a fixed charge is most of the story, which is the reason the same $6.53 stings less on $600 than on $100. See how to spot a bad transfer deal for the checks that save money.
Cash funding and the US excise tax
One rule in US law lands hard on these three corridors. Section 4475 of the Internal Revenue Code taxes remittances at 1% when the money handed over is physical: banknotes, or paper instruments of the money-order kind. It applies to transfers made from 1 January 2026. The statute carves out money pulled from a bank account and money loaded from a card issued in the US. The sender owes it; the provider collects it. Treasury published proposed regulations in April 2026, and ask your provider how it applies the rule today.
A made-up example: a Honduran family’s relative hands over $400 in cash at a store counter and pays $4 in tax before any fee. Funding the same transfer from a debit card would have avoided that $4. For the full rule, see the US to Nigeria guide.
In August 2025 analysts at Grupo Cibest, as reported by a Salvadoran newspaper, estimated the tax could trim remittances to El Salvador by up to 0.35%, roughly US$30 million. That was a forecast made before the rule took effect, so read it as a sense of scale and not as a result.
Receiving end: cash, accounts and dollars
The October 2025 breakdown above shows that remittance companies and banks carried nearly all the volume in El Salvador. For a cash payout the receiver needs an ID and the reference number, and a misspelt name is the commonest reason a pickup stalls. A bank deposit needs an account in the receiver’s own name. The guide on bank, card, cash pickup or wallet lays out the trade-offs.
Ask whether the receiver can be paid in dollars. In Guatemala and Honduras availability varies by provider and payout partner. A dollar payout hands the conversion decision to the receiver, who then faces the local counter’s rate, and whether that beats the sender’s provider nobody can tell in advance.
Before you send
- Decide how you will fund the transfer. A card or bank account avoids the cash tax.
- Ask for the local-currency amount, and check it against the mid-market rate.
- Confirm the payout method and the receiver’s ID requirement.
- Spell the name exactly as it appears on the receiver’s ID.
Beyond that, nobody can say where these currencies or flows head next. Not the central banks, and not us. For large sums or tax questions, check with your provider or an adviser.
Sources
- World Bank indicator: personal remittances received (% of GDP)
- Emisoras Unidas: Guatemala remittances in 2025 (Banguat figures)
- Diario El Mundo: El Salvador closed 2025 with US$9,987.9 million in remittances (BCR)
- El Diario de Hoy: El Salvador reports record remittances despite migration fears
- El Heraldo: Honduras remittances exceed US$11 billion (BCH data)
- Tico Times: El Salvador amends its bitcoin law (February 2025)
- Banco de Guatemala: exchange-rate regime presentation
- IMF: Honduras staff report (2024)
- World Bank Remittance Prices Worldwide: United States to Guatemala
- 26 U.S. Code section 4475: excise tax on remittance transfers
Checked: November 2026
