Which 1998 crisis began when Russia defaulted on domestic debt and devalued the ruble?

The 1998 crisis that began when Russia defaulted on domestic debt and devalued the ruble was the Russian financial crisis. It erupted in August 1998 after years of fiscal pressure and weak economic performance.

Russia depended heavily on energy and raw-material revenues while maintaining a costly exchange-rate policy. Falling oil prices reduced government income, and investors became increasingly concerned about the sustainability of Russian debt.

On August 17, the government announced a devaluation of the ruble, a temporary moratorium on some foreign debt payments, and a restructuring of domestic ruble debt. The ruble then lost much of its value.

The turmoil contributed to the failure of the U.S. hedge fund Long-Term Capital Management, which held highly leveraged positions in global markets. The Russian crisis is distinct from the broader 1997 Asian financial crisis, although the two episodes were closely connected through investor sentiment.