In the 1998 Russian financial crisis, Russia devalued the Russian ruble on August 17, 1998.
The government widened the ruble’s trading band, effectively devalued the currency, and declared a temporary moratorium on some foreign debt payments. Russia was under pressure from falling commodity prices, weak tax collection, budget problems, and the financial turmoil that had spread through emerging markets after the Asian crisis.
The announcement intensified losses in Russian shares and government debt. Banks and businesses faced serious stress, while savers saw the value of ruble deposits fall. The crisis also contributed to the collapse of Long-Term Capital Management, a highly leveraged U.S. hedge fund, after markets became unusually volatile.
The ruble was not formally redenominated during this episode; it was devalued. Russia later introduced a new ruble in 1998 by removing three zeros, but that currency reform is a separate detail from the August crisis decision.