The 1994 Mexican crisis nicknamed after tequila was the Tequila Crisis.
The crisis began after Mexico devalued the peso in December 1994. Investors quickly withdrew capital, and Mexico faced difficulty meeting short-term foreign-currency obligations. The shock spread to other emerging markets as investors reassessed risks, producing what became known as the “Tequila Effect.”
Mexico received an international rescue package involving the United States, the International Monetary Fund, and other institutions. The support helped Mexico meet its obligations and stabilize financial conditions, although the economy experienced a severe recession and rising unemployment.
The nickname does not mean that tequila caused the crisis. It is a colorful label for a financial episode centered on exchange-rate pressure, foreign debt, capital flight, and investor contagion. The event preceded the 1997 Asian financial crisis and is distinct from the later Russian crisis.