Russia defaulted on its domestic debt and devalued the ruble during the 1998 Russian financial crisis.
On August 17, 1998, Russia announced a de facto devaluation of the ruble, a temporary moratorium on some foreign debt payments, and a restructuring of domestic government debt. The measures followed falling oil prices, weak tax collection, political uncertainty, and pressure on the country’s exchange-rate regime.
Russian banks and businesses suffered as the ruble’s value collapsed and borrowers struggled with foreign-currency obligations. The crisis also damaged investors elsewhere, especially after Russia’s default contributed to the near-collapse of Long-Term Capital Management in the United States.
The episode is sometimes confused with Russia’s 1998 stock-market decline alone. The broader crisis involved currency, sovereign debt, banking, and equity markets together. Russia later benefited from higher oil prices and stronger public finances in the 2000s.