Tequila Crisis

The Tequila Crisis of 1994 was a sudden economic turmoil in Mexico triggered by the abrupt devaluation of the peso after a period of strong growth. Investors lost confidence, leading to a rapid outflow of foreign capital, a sharp fall in the peso's value, and soaring interest rates. This caused widespread financial instability, increased inflation, and a recession. The government initially tried to stabilize the economy but eventually had to seek international financial help, including a bailout from the United States and the International Monetary Fund, to restore confidence and prevent a full-blown economic collapse.