Mexico's 1994 financial crisis, marked by a sharp peso devaluation and falling asset prices, is commonly called the Tequila Crisis.
The crisis began shortly after President Ernesto Zedillo took office in December 1994. Mexico devalued the peso, which had been maintained within a controlled exchange-rate band. Investors rapidly withdrew capital, and the peso lost much of its value.
Mexico had accumulated substantial short-term dollar-linked debt known as tesobonos. As confidence deteriorated, the government faced difficulty refinancing those obligations. The United States and international institutions assembled a rescue package of about 50 billion dollars, helping stabilize Mexico's finances.
The crisis also affected other emerging markets through investor contagion. It is sometimes called the December Mistake in Mexico, referring to the government's handling of the devaluation. The term Tequila Crisis was popularized internationally rather than being Mexico's only name for the episode.