History of debt defaults: The Mexican Peso Crisis and Debt Default in 1994

On December 20, 1994, the government of Mexico announced the devaluation of its currency, surprising financial markets and precipitating the so-called Mexican peso crisis. Mexican current account deficit rose to about 8% of the GDP, s international reserves declined about two thirds. December 20 failed to stabilize peso financial markets; two days later, the Mexican authorities were forced to allow the peso to float freely, and its external value plummeted. On February, IMF approved an 18-month stand-by credit for Mexico of up to the USD 17.8 Bn in support of the Government's 1995-96 economic and financial program. It was 300% of Mexico's IMF quota.