Mexico’s 1994 currency crisis that caused a dramatic stock-market fall was called the Tequila Crisis.
The crisis began in December 1994 when Mexico devalued the peso after foreign-exchange reserves became dangerously low. Investors rapidly withdrew capital, causing the peso to lose much of its value and sending Mexican equities sharply downward. The turmoil spread to other emerging markets, a transmission sometimes called the “Tequila effect.”
Mexico received an international rescue package organized by the United States and the International Monetary Fund. The assistance helped stabilize the currency and restore access to financial markets, but the country entered a deep recession and unemployment rose.
The nickname is a reference to Mexico’s best-known spirit, not to a particular company or exchange. The event is also known as the Mexican peso crisis of 1994–95.