Which 1998 crisis caused Russia to default on domestic debt and helped trigger a global stock-market sell-off?

The 1998 crisis in which Russia defaulted on domestic debt and helped trigger a global stock-market sell-off was the Russian financial crisis.

Russia faced falling commodity prices, weak tax collection, political instability, and heavy short-term borrowing. On 17 August 1998, the government devalued the ruble, declared a moratorium on some private foreign debt payments, and restructured domestic ruble debt.

The shock spread through international markets. Investors reduced exposure to emerging economies, and the Russian default contributed to severe stress at Long-Term Capital Management, a highly leveraged U.S. hedge fund. The Federal Reserve helped organize a private-sector rescue of the fund in September 1998.

The crisis is sometimes grouped with the 1997 Asian financial crisis, but Russia’s default and ruble collapse were separate developments. Their close timing made investors view them as part of a wider emerging-market contagion.