What name is given to the 1994 Mexican financial and stock-market crash?

The 1994 Mexican financial and stock-market crash is known as the Tequila Crisis.

The crisis began in December 1994 when Mexico devalued the peso after its fixed exchange-rate regime came under severe pressure. Investors lost confidence, capital flowed out of the country, and the peso fell dramatically. Mexico’s stock market and financial system were hit as businesses and banks faced debts denominated in U.S. dollars.

Political instability, a large current-account deficit, and short-term dollar-linked government debt called tesobonos made the situation more dangerous. Mexico received an international rescue package led by the United States and the International Monetary Fund.

The crisis also affected other emerging markets, especially in Latin America. In international economics, it is often called the Mexican peso crisis; “Tequila Crisis” is the widely used nickname. It should not be confused with the 1997 Asian financial crisis, which began in Thailand.