Which 1998 event followed Russia’s default on domestic debt and ruble devaluation?

The 1998 event that followed Russia’s domestic-debt default and ruble devaluation was the Russian financial crisis.

On 17 August 1998, the Russian government and central bank announced a restructuring of ruble-denominated domestic debt, a widening of the ruble’s trading band, and a temporary moratorium on some foreign-debt payments. The announcement amounted to a sovereign default on much of Russia’s domestic debt.

Russia’s economy had been weakened by low oil prices, declining tax revenues, political instability, and the financial aftershocks of the Asian crisis. The ruble lost much of its value, banks failed, and investors faced large losses in Russian securities.

The crisis also affected markets outside Russia. The highly leveraged U.S. hedge fund Long-Term Capital Management suffered severe losses because it held large positions in global bonds and derivatives. The U.S. Federal Reserve helped arrange a private-sector recapitalization of the fund, illustrating how a sovereign crisis could transmit risk through international financial links.