The 1994–1995 Mexican financial collapse after the peso was devalued is commonly called the Tequila Crisis.
Mexico’s government devalued the peso in December 1994 after pressure on the currency and declining investor confidence. The devaluation exposed weaknesses in Mexico’s financial system, including substantial short-term dollar-linked debt. Investors rapidly withdrew capital, sending the peso lower and causing severe stress in banks and companies.
The crisis affected stock markets and spread through investor concerns about other emerging economies. The United States, the International Monetary Fund, and other institutions assembled a large support package to help Mexico meet its external obligations and restore confidence.
The episode is also known as the Mexican peso crisis. “Tequila Crisis” became the memorable international nickname, while “peso crisis” is the more descriptive term. It is separate from Mexico’s 1982 debt crisis, although both involved major financial instability.