During the 1998 Russian financial crisis, Russia devalued the Russian ruble and partially defaulted on domestic debt.
On 17 August 1998, the government widened the ruble's trading band, announced a 90-day moratorium on some private foreign debt payments, and restructured parts of its domestic debt. The ruble subsequently lost much of its value, causing severe stress for banks, businesses, and households.
The crisis followed years of weak tax collection, large budget deficits, heavy reliance on short-term government securities, and falling prices for key Russian exports. The Asian financial crisis and lower oil prices reduced investor confidence and made refinancing increasingly difficult.
Russia's turmoil also affected international markets. The collapse of the hedge fund Long-Term Capital Management later in 1998 prompted a private-sector rescue arranged with Federal Reserve involvement, because officials feared wider financial disruption. The ruble is distinct from the Soviet ruble, which had ceased to exist after the Soviet Union dissolved.