The 1994 Mexican financial crisis that triggered a sharp global-market sell-off was called the Tequila Crisis.
The crisis began in December 1994 after Mexico devalued the peso, ending a period in which the currency had been maintained within a controlled exchange-rate band. Investors quickly lost confidence, capital flowed out, and Mexico struggled to meet obligations denominated in foreign currency.
The shock spread beyond Mexico through the so-called tequila effect, as investors reassessed emerging-market assets in other countries. The United States and international institutions assembled a rescue package worth tens of billions of dollars, helping Mexico avoid a disorderly default.
The crisis reflected several vulnerabilities, including a large current-account deficit, short-term dollar-linked debt, political uncertainty, and limited foreign-exchange reserves. The nickname refers to tequila as a symbol of Mexico, not to a stock exchange or a particular company.