In 1994, the world saw the decline of the Mexican peso, leading to what is now considered the Mexican Peso Crisis. The crisis was characterized by the drastic drop in the value of the Mexican peso. The Mexican peso crisis is considered significant because of its impact on other parts of the region, notably Brazil. The following is a discussion of the causes and impact of the Mexican peso crisis. The events/causes that led to the devaluation of the peso. The Mexican peso crisis can be attributed to then-President Zedillo's decision to reverse the then government's policy of imposing strict controls on the Mexican peso. This decision is seen by critics as a significant factor that led to the Mexican peso crisis (Mathur, 17). It is important to note that the lifting of strict controls on the Mexican peso was intended to make certain adjustments that would intentionally have the effect of devaluing the Mexican peso. However, the objective of devaluation was only gradually in order to make the country competitive in the international business environment (Bhagwati, 8). The main factor that caused this decision to contribute to the Mexican peso crisis was that it was not handled properly as it should have been. The management of the lifting of monetary controls was not effective at the policy or political level, so that the Mexican peso experienced a drastic and continuous devaluation, which was contrary to the planned gradual and slight devaluation of the cash. The result of the drastic decline of the Mexican peso ultimately led to the crisis (Mathur, 17). The decision to lift exchange controls can also be attributed to pre-election decisions that aimed to stimulate the Mexican economy in order to meet e...... middle of article ......risis shows l The importance of bringing policy changes with effective political management to prevent such a crisis from happening again. Works cited Agenor, Pierre-Richard and Paul Masson. “Credibility, reputation and the crisis of the Mexican peso”. Journal of Money, Credit and Banking, Vol. 31, no. 1 (1999): 70-84. Bhagwati, Jagdish. “The myth of capital: the difference between trading gadgets and trading dollars”. Foreign Affairs; Flight. 77, no. 3 (1998): 7-12. Calvo, Guillermo and Enrique Mendoza. “Small crime and cruel punishments: lessons from the Mexican debacle”. The American Economic Review, Vol. 86, no. 2 (1996): 170-175. Cooney, Paul. “The Mexican crisis and the maquiladora boom”. Latin American Perspectives, Vol. 28, no. 3 (2001): 55-83. Mathur, Ike et al. "Spillover effects of the 1994 Mexican peso crisis". The Financial Review, Vol.. 37 (2002): 17-34.