What name is given to the 1998 collapse of Russia’s financial markets and ruble?

The 1998 collapse of Russia’s financial markets and ruble is known as the Russian financial crisis.

Russia devalued the ruble and defaulted on domestic government debt in August 1998. The crisis followed years of fiscal weakness, low tax collection, political uncertainty, and heavy reliance on short-term government securities to finance the state.

Falling oil and commodity prices reduced export income, while investors became increasingly unwilling to roll over Russian debt. The government and central bank eventually widened the ruble’s trading band and then allowed a major devaluation.

The event had consequences beyond Russia. The failure of the hedge fund Long-Term Capital Management soon afterward created wider concerns about global financial stability and required a private-sector rescue arranged with Federal Reserve involvement. The Russian crisis was related to the broader emerging-market turmoil of the late 1990s but was not the same event as the 1997 Asian financial crisis.