Which 1994 Mexican crisis was triggered after the peso was devalued?

The 1994 Mexican crisis triggered after the peso was devalued was the Mexican peso crisis.

Mexico had maintained the peso within a controlled exchange-rate regime while attracting substantial foreign capital. Political uncertainty, a current-account deficit, and a large stock of short-term dollar-linked obligations made the system vulnerable when investor confidence weakened.

In December 1994, the government devalued the peso. Investors then rapidly withdrew capital, and the currency fell much further than officials had intended. Mexico’s financial stress spread to other emerging markets, a transmission effect widely called the Tequila Effect.

The United States and international institutions assembled a rescue package worth tens of billions of dollars. The crisis is sometimes called the Tequila Crisis, but that nickname describes the same episode rather than a separate crash. The event became a major example of how exchange-rate policy and short-term foreign financing can interact dangerously.