1994 Mexican peso crisis

The 1994 Mexican peso crisis was a financial emergency caused by Mexico's economic issues, including large government deficits and reduced foreign reserves. The government had tried to maintain a fixed exchange rate between the peso and the dollar, but failing to adjust it when economic conditions worsened led to a loss of confidence. Investors quickly pulled out their money, causing the peso to plummet in value. To stabilize the economy, Mexico had to buy back pesos with foreign reserves and seek international aid, leading to a deep recession and highlighting vulnerabilities in financial management and policy.