MEXICO CITY – Mexico's peso plummeted over 3 percentTuesday to an all-time low of 12.40 to the dollar, extending huge losses from Monday, when it fell more than 6 percent.

The currency dropped 3.39 percent in early morning trade on Tuesday.

The peso plunged on Monday in its biggest one-day drop in over a decade and stocks sank on fears the global economy was lurching into recession despite efforts to halt worldwide financial panic.

The peso on Monday fell 6.43 percent to 11.98 per dollar, its weakest level since the government ended currency controls in late 1994.

It was also the peso's biggest one-day percentage slide since March 1995, when Mexico's economy crashed in a meltdown known as the Tequila Crisis.

(Reporting by Lizbeth Salazar, Editing by Walker Simon)