The 1994–1995 Mexican financial crisis triggered by the peso devaluation was called the Tequila Crisis.
The Tequila Crisis began in December 1994, shortly after Mexico's newly elected government devalued the peso. The country had maintained a managed exchange-rate regime while relying heavily on short-term foreign capital. When investors doubted Mexico's ability to repay dollar-linked obligations known as tesobonos, capital fled and the peso plunged.
The shock spread through emerging markets, especially countries that investors viewed as carrying similar risks. The United States organized a rescue package involving loans and guarantees, with support from the International Monetary Fund and other institutions. Mexico repaid the U.S. assistance ahead of schedule, but the crisis caused a severe recession and financial strain for Mexican households and companies.
“Tequila Crisis” is the widely used English name, while “December Mistake” is a separate phrase associated with the policy decision that helped trigger the collapse. The episode demonstrated how quickly foreign-exchange pressure could become a stock-market and banking crisis.