Russia announced its default and ruble devaluation on August 17, 1998, triggering the 1998 Russian financial crisis.
The government declared a 90-day moratorium on some foreign debt payments, widened the ruble’s trading band, and effectively devalued the currency. Russia was struggling with falling commodity prices, large budget deficits, weak tax collection, and the financial aftershocks of the Asian crisis.
The announcement caused the ruble to plunge and damaged confidence in Russian government debt and banks. International investors reduced exposure to emerging markets, and the consequences spread beyond Russia. The hedge fund Long-Term Capital Management later suffered enormous losses, prompting a private-sector rescue organized by the U.S. Federal Reserve.
Russia’s 1998 crisis is sometimes described simply as a sovereign default, but the event also involved currency devaluation and banking turmoil. The exact date is important because the announcement marked the decisive break with the previous exchange-rate policy.