The 1994 Mexican financial-market crash triggered by the peso devaluation was the Tequila Crisis.
Mexico devalued the peso in December 1994 after pressure on its currency reserves and exchange-rate system became unsustainable. Investors quickly reassessed Mexican assets, causing capital flight, falling share prices, and a severe financial crisis.
The crisis had several underlying vulnerabilities, including short-term dollar-linked debt known as tesobonos, a large current-account deficit, and political uncertainty. The shock spread to other emerging markets, especially in Latin America, through higher risk premiums and investor withdrawals.
The United States and international institutions assembled a rescue package to help Mexico meet its obligations. The nickname Tequila Crisis refers to Mexico and is distinct from the 1982 Latin American debt crisis and the 1997 Asian financial crisis, although all involved international contagion and currency pressure.