In the mid-1990s, Mexico experienced a financial crisis caused by a number of complex financial,
economic, and political factors. The early 1990s in Mexico were marked by a large increase in
foreign investment as investor confidence in the Mexican economy grew due to the prospect of
NAFTA. However, signs that Mexico’s economy was not as fundamentally strong as it appeared
began to surface after the assassination of Mexican presidential candidate Luis Donaldo Colosio
in March 1994.8 The shock of the assassination resulted in a subsequent outflow of foreign
exchange reserves and growing concerns about a currency devaluation. In response to these
concerns, the Mexican government issued short-term dollar-indexed notes to finance the growing
current account deficit