The Mexican peso crisis, also known as the Tequila Crisis, erupted in December 1994 when the Mexican government was forced to devalue the peso against the U.S. dollar, triggering a massive capital flight and a severe recession. The crisis spread to other emerging markets, earning the nickname 'the Tequila Effect,' and required a $50 billion international bailout led by the United States. The event highlighted the dangers of short-term capital flows and the importance of transparent monetary policy.

The crisis deeply affected Mexican literature and poetry, with writers like Carlos Fuentes and Elena Poniatowska exploring the social and economic dislocation it caused. The Tequila Crisis also influenced the 'crisis poetry' that emerged in Latin America in the 1990s, which critiqued the neoliberal policies that had contributed to the collapse.