The 1994 Mexican financial crisis that caused a sharp stock-market and currency collapse was called the Tequila Crisis.
The crisis began after Mexico devalued the peso in December 1994. Investors withdrew capital, foreign-exchange reserves fell, and the peso lost much of its value. The sudden reversal followed years of heavy capital inflows and concerns about Mexico’s external debt and political stability.
The turmoil spread beyond Mexico, particularly to other emerging markets in Latin America. The United States, Canada, and international financial institutions assembled a rescue package that helped Mexico meet its external obligations and stabilize the peso.
The name Tequila Crisis refers to Mexico’s cultural association with tequila and to the episode’s regional economic impact. It is also known as the Mexican peso crisis, but that longer description is not the crisis’s best-known nickname.