Mexico (Tequila Crisis)

The Tequila Crisis refers to a severe financial crisis that hit Mexico in late 1994 and early 1995. Triggered by political instability and a rapid devaluation of the peso, the crisis led to skyrocketing inflation and widespread economic turmoil. As investors lost confidence, they pulled out their money, further weakening the economy. The United States and other nations intervened with a $50 billion bailout to stabilize Mexico. The crisis highlighted vulnerabilities in emerging markets and had lasting effects on international finance, prompting reforms and increased scrutiny of capital flows in developing economies.