What was the name of Russia’s 1998 financial crisis, when the ruble collapsed and the government defaulted on domestic debt?

Russia’s 1998 financial crisis was the episode in which the ruble collapsed and the government defaulted on domestic debt.

The crisis followed years of fiscal weakness, low tax collection, political uncertainty, and dependence on short-term government securities known as GKOs. Falling prices for oil and other commodities reduced export revenue, while the 1997 Asian financial crisis weakened investor confidence in emerging markets.

On 17 August 1998, Russia devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic ruble-denominated debt. The ruble’s value fell sharply, causing severe inflation and major losses for banks and investors. The government later stabilized the economy, helped by higher oil prices and improved fiscal conditions.

It is often confused with the broader Asian financial crisis, but Russia’s crisis had its own immediate causes and occurred after the Asian turmoil had already begun. The episode also contributed to the collapse of the U.S. hedge fund Long-Term Capital Management, which required a private-sector rescue coordinated by the Federal Reserve Bank of New York.