Devaluation of the Peso

        Zedillo's first three weeks in office were economically and politically volatile.  After the rebellion in Chiapas, investors began to pull billions of dollars out of Mexico.  The peso crashed, losing more than half its value in a matter of  months.

        In December of 1994 the Zedillo government was forced to devalue the peso by 50% which ultimately led to the collapse of the Mexican stock market.  The government devalued the peso in an attempt to stop the flow of investment capital leaving the country, blaming the Zapatistas and claiming that their threats "fueled pressure on the peso and on the stock market" (Economist).

        United States and the International Monetary Fund offered Mexico a $20 million bailout in hopes of keeping their friend to the south afloat, though this "gift" didn't come without consequences.  In order to receive payment, Mexico agreed to more cutbacks on social, educational and infrastructure spending.  The act furthered Mexico's dependence on the United States and foreign interests, an indication of the country's disappearing sovereignty, according to many.

 
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Copyright ©1997 Becca Renk, Becky Jarvis, Josh Guttmacher
All images copyright their various creators.
Last revision -- Dec. 1997