Peso Panic: Mexico's currency plunges

Mexico's currency plunges

After six years of economic crisis, Mexico's prospects finally seemed to brighten this year. The country's stock market became the world's fastest- rising exchange, as share prices climbed more than 649% during the first nine months of 1987. The government's foreign currency reserves swelled by 150% to a comfortable $17 billion, the highest level of any Latin American debtor country, and a surge of exports helped the Mexicans rack up a $6.6 billion trade surplus.

Now, just as suddenly as the financial picture turned sunny, it has clouded over again. Last week the Mexican peso began to gyrate wildly. By Friday...