Which 1998 event caused Russia’s stock market to plunge after the government defaulted on domestic debt?

The Russian financial crisis caused Russia’s stock market to plunge after the government defaulted on domestic debt in 1998.

Russia devalued the ruble and defaulted on some domestic debt obligations on 17 August 1998. The announcement followed falling commodity prices, weak tax collection, political uncertainty, and pressure on the government’s finances. The ruble subsequently lost much of its value.

Russian banks and businesses were heavily affected, and the crisis produced a deep economic contraction. International investors also suffered losses. The turmoil followed the 1997 Asian financial crisis and contributed to a broader reassessment of risk in emerging markets.

The event is sometimes shortened to the “Russian default,” but the financial crisis included more than the debt default alone. Currency devaluation, banking failures, inflation, and economic disruption were closely connected parts of the episode.