Explain the Mexican peso currency crisis.
A sharp increase in U.S.interest rate in 1994 reversed U.S.-to-Mexico capital flows,putting pressure on the peso.To try to stop the capital flows,Mexico issued short-term,dollar-denominated securities.However,investors still lacked confidence in the peso,and thus the capital outflow did not stop.Mexico was forced to devalue the peso by 15%,but when this turned out not to be sufficient,the peso was allowed to float,resulting in a rapid depreciation.The U.S.and the IMF provided support to help to stabilize the peso,but Mexico was unable to avoid a severe recession.

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The Answer of Explain the Mexican peso currency crisis.
A sharp increase in U.S.interest rate in 1994 reversed U.S.-to-Mexico capital flows,putting pressure on the peso.To try to stop the capital flows,Mexico issued short-term,dollar-denominated securities.However,investors still lacked confidence in the peso,and thus the capital outflow did not stop.Mexico was forced to devalue the peso by 15%,but when this turned out not to be sufficient,the peso was allowed to float,resulting in a rapid depreciation.The U.S.and the IMF provided support to help to stabilize the peso,but Mexico was unable to avoid a severe recession.

Explain the Mexican Peso Currency Crisis