Which 1994 Mexican financial crisis was nicknamed the Tequila Crisis?

The 1994 Mexican financial crisis nicknamed the Tequila Crisis was the Mexican peso crisis.

The crisis began after Mexico devalued the peso in December 1994. Investors had become concerned about Mexico’s current-account deficit, political instability, and the country’s ability to maintain its exchange-rate regime. Capital flowed out, foreign-currency debt became harder to service, and the peso lost substantial value.

The shock spread beyond Mexico to other emerging markets, especially in Latin America. The nickname “Tequila Crisis” referred to the Mexican origin of the shock and its regional spillover, rather than to a stock-market index or a specific exchange. International support, including a U.S.-backed rescue package, helped Mexico meet its obligations and stabilize the situation.

This crisis is distinct from the 1997 Asian financial crisis. Both involved pressure on exchange rates and capital flight, but the Asian episode began with Thailand’s baht crisis, while the Tequila Crisis centered on Mexico’s peso and the 1994 devaluation.