Which 1994 Mexican market crash is commonly known by the name of Mexico’s currency?

The 1994 Mexican market crash is commonly known as the Tequila Crisis.

The crisis began in late 1994 after investors lost confidence in Mexico’s exchange-rate policy and financial position. The Mexican government devalued the peso in December 1994, and the currency then fell sharply. Mexican stocks and bonds suffered as foreign capital fled.

Mexico had financed substantial current-account deficits with short-term foreign investment. Much of the government’s debt was linked to the dollar through tesobonos, increasing the danger when the peso weakened. Political instability and depleted foreign reserves further damaged confidence.

The United States and international institutions arranged a rescue package worth tens of billions of dollars. The crisis also became a warning about how quickly capital flows can reverse in emerging markets. “Tequila Crisis” is the standard English name, while “December Mistake” refers specifically to the government’s decision and handling of the devaluation rather than the whole financial episode.