Mexico suffered the 1994 stock-market crisis commonly called the Mexican peso crisis.
The crisis erupted in December 1994 after Mexico devalued the peso, which had been maintained within a controlled exchange-rate system. Investors quickly lost confidence, and capital flowed out of the country. The peso fell sharply, Mexican financial markets plunged, and the shock spread to other emerging markets in what became known as the Tequila Crisis.
Mexico had accumulated substantial short-term dollar-linked obligations, including tesobonos. Once the peso weakened, repaying those obligations became more difficult in domestic-currency terms. Political instability and concerns about Mexico’s current-account deficit also contributed to investor anxiety.
The United States and international institutions assembled a rescue package worth tens of billions of dollars. The crisis was painful, but Mexico later recovered and strengthened aspects of its financial policy. The episode is separate from the 1982 Latin American debt crisis and the 1997 Asian financial crisis, though all three involved international capital flows and currency pressure.