What nickname was given to Mexico’s 1994–1995 financial crisis and stock-market crash?

The nickname given to Mexico’s 1994–1995 financial crisis and stock-market crash was the Tequila Crisis.

The crisis began after Mexico devalued the peso in December 1994. The country had large short-term dollar-denominated obligations, and investors rapidly lost confidence in the government’s ability to maintain the peso’s exchange-rate policy. Capital flowed out, reserves fell, and financial stress spread through Mexican markets.

The resulting emergency required international assistance. The United States and the International Monetary Fund helped assemble a rescue package worth tens of billions of dollars, enabling Mexico to meet its obligations and stabilize the currency. The crisis also caused a sharp recession and rising unemployment in Mexico.

The phrase “Tequila Crisis” refers specifically to Mexico’s episode, not to every Latin American market crash. The shock also affected other emerging markets, a wider spillover sometimes called the “Tequila Effect.”