What was the 1998 collapse of Russia’s financial markets and ruble commonly called?

The 1998 collapse of Russia’s financial markets and ruble was commonly called the 1998 Russian financial crisis.

Russia had accumulated substantial government debt while relying heavily on short-term borrowing and tax revenues that were difficult to collect. Falling commodity prices and the wider emerging-market turmoil that followed the Asian financial crisis made refinancing increasingly difficult.

In August 1998, Russia devalued the ruble, defaulted on domestic debt, and declared a temporary moratorium on some foreign debt payments. The ruble lost much of its value, while banks and investors suffered severe losses. The crisis also affected international markets through the failure of the hedge fund Long-Term Capital Management.

The episode is distinct from the 1997 Asian financial crisis, although contagion and investor risk aversion helped transmit pressure between emerging markets. Russia’s economy later benefited from higher oil prices and a weaker ruble.