What was the name of the 1998 collapse of the Russian ruble and government bond market?

The 1998 collapse of the Russian ruble and government bond market was the 1998 Russian financial crisis.

Russia struggled with heavy government borrowing, weak tax collection, low commodity prices, and political uncertainty. The country relied heavily on short-term domestic government debt, known as GKOs, while maintaining pressure on the ruble’s exchange rate. Investors eventually doubted that this structure could continue.

On August 17, 1998, Russia devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic debt. The ruble then lost much of its value, while Russian stocks and bonds fell sharply. The crisis damaged banks and households and contributed to a severe economic contraction.

The Russian crisis also affected international markets. Investor fear spread to other emerging economies, and the highly leveraged hedge fund Long-Term Capital Management suffered enormous losses. A private-sector rescue of LTCM followed in September, though Russia’s crisis and the LTCM episode were separate events.