The mexican peso crisis o On 20 December, 1994, the Mexican government announced a plan to devalue the peso against the dollar by 14 percent This decision changed currency traders expectations about the future value of the peso o They stampeded for the exits o In their rush to get out the peso fell by as much as 40 percent McGraw-Hilylrwoin 2-21 Copyright@ 2001 by The McGraw-Hill Companies, Inc. All rightsMcGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-21 The Mexican Peso Crisis ⚫ On 20 December, 1994, the Mexican government announced a plan to devalue the peso against the dollar by 14 percent. ⚫ This decision changed currency trader’s expectations about the future value of the peso. ⚫ They stampeded for the exits. ⚫ In their rush to get out the peso fell by as much as 40 percent