What the Declining U.S. Dollar Means for Nearshore Call Center Operations

The recent weakening of the U.S. dollar has created new complexities for companies operating or considering call center investments in Latin America. As regional currencies appreciate, many nearshore service providers are feeling the squeeze: contracts priced in U.S. dollars no longer provide the same local value, and labor costs are rising.

For companies outsourcing to Mexico, Colombia, Costa Rica, or Argentina, this shift is more than an economic headline. It directly affects operating margins, pricing strategies, and vendor negotiations. Site Selection Group is actively advising clients on how to adjust their location strategies, cost models, and contract structures in light of these new currency dynamics.

Understanding the Dollar Decline

In 2025, the U.S. Dollar Index has fallen nearly 5% from its previous highs. Currencies in major nearshore markets have appreciated significantly:

• Colombian Peso: +7.36%
• Argentine Peso: +40%
• Mexican Peso: +5%
• Costa Rican Colon: Up ~25% since late 2022

These shifts make it more expensive for U.S.-based companies to operate in local currency terms. Contracts priced in dollars are now worth less to vendors and their employees, especially as labor and infrastructure costs rise.

Why This Matters for Call Centers

Nearshore call centers have long been positioned as a cost-effective, culturally aligned alternative to domestic U.S. operations. But the weakening dollar is eroding some of those cost advantages.

1. Labor Costs Are Increasing in Real Terms

Many nearshore countries have also raised minimum wages in response to inflation. When paired with local currency appreciation, this compounds payroll cost pressures for call center operators.

• Mexico: +12% minimum wage increase in 2025
• Colombia: Minimum wage has nearly doubled over the past decade
• Argentina and Dominican Republic: +20% wage hikes this year

Even if agents earn well above minimum wage, market benchmarks tend to shift upward as base salaries rise across the economy.

2. BPO Vendor Profitability Is Being Squeezed

Business Process Outsourcing (BPO) vendors that signed multi-year, fixed-rate contracts in USD are now seeing their margins erode as local currencies strengthen. This could lead to requests for mid-contract price adjustments, reduced investment in training or quality programs, and a hesitancy to expand or staff new programs.

3. U.S. Buyers May Face Price Recalibration

Clients may begin seeing cost escalation from vendors in 2025-2026 RFPs, even in traditionally lower-cost markets. While nearshore remains more affordable than domestic outsourcing, the gap may be narrowing in key markets.

Which Countries Are Most Affected?

Highly Impacted:

• Argentina: A dramatic currency rebound and 76% increase in minimum wage are making Argentina one of the most expensive markets in dollar terms.
• Costa Rica: A 25% appreciation in the colon has already impacted tourism and could put pressure on BPO pricing.
• Colombia: Strong peso performance and sustained wage growth could affect new contracts.

Moderately Affected:

• Mexico: Rising wages and a stronger peso have increased scrutiny, but its deep talent pool and scale still make it competitive.
• Brazil and Peru: Impacted by moderate currency appreciation and inflation, but less volatile than some other locations.

Lower Risk:

• Dominican Republic: The peso tracks closely with the dollar, providing stability.
• Nicaragua, Honduras: Mitigated risk due to pegged or closely controlled currency exchange rate systems.

Strategic Considerations for U.S. Companies

Site Selection Group recommends clients take a proactive approach to currency and wage trends by:

• Re-evaluating pricing models for existing and upcoming contracts
• Benchmarking real estate and wage data quarterly, not annually
• Exploring diversified footprints to hedge against regional fluctuations
• Building in currency adjustment clauses for new vendor contracts
• Considering stable economies or dual-market strategies to manage foreign-exchange risk

The Bottom Line

The weakening U.S. dollar doesn’t spell the end of nearshore call center operations. But it does require a more strategic approach to selecting markets, negotiating vendor agreements, and modeling total cost.

Nearshore outsourcing is still a powerful tool in the global services mix for call center strategies. But the economics are shifting and companies that adapt early will retain their competitive edge.

Site Selection Group stands ready to help you navigate these changes with location intelligence, vendor insights, and financial modeling tailored to the realities of 2026.