What name is given to Russia’s 1998 financial crisis, marked by a ruble collapse and sovereign default?

Russia’s 1998 financial crisis, marked by a ruble collapse and sovereign default, is called the Russian financial crisis.

The crisis developed after years of weak tax collection, low industrial output, heavy government borrowing, and dependence on energy and raw-material exports. The Asian financial crisis and falling oil prices placed additional pressure on Russia’s finances. Investors became increasingly unwilling to buy Russian government debt.

On 17 August 1998, the Russian government devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic debt. The ruble lost much of its value, banks failed or became insolvent, and inflation surged. The shock also affected international investors and contributed to the collapse of the hedge fund Long-Term Capital Management.

The event is sometimes described simply as Russia’s 1998 default, but the broader term covers the linked currency, banking, and government-debt crisis.