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

Mexico’s 1994–1995 peso and stock-market crisis was nicknamed the Tequila Crisis.

The crisis began after Mexico devalued the peso in December 1994. Investors had become concerned about Mexico’s foreign-exchange reserves, political instability, and the country’s large volume of short-term dollar-linked obligations. Once confidence broke, capital flowed out rapidly, the peso lost value, and Mexican share prices and economic activity suffered.

The nickname became widely used internationally to describe the spillover effects of Mexico’s financial collapse. The United States organized a substantial rescue package, including loans and guarantees, while the International Monetary Fund also provided support. Mexico later stabilized its currency and returned to financial markets.

The episode is sometimes called the Mexican peso crisis or the December Mistake, a translation of the Mexican expression “Error de diciembre.” It was not a conventional global stock-market crash, but it was a major emerging-market crisis with serious effects on equities, debt, and neighboring economies.