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

The 1998 market crash followed Russia’s default on domestic debt and ruble devaluation.

On August 17, 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 private foreign debt payments. The measures amounted to a sovereign default and currency crisis.

Russia’s economy was already strained by low oil prices, weak tax collection, political uncertainty, and the costs of the First Chechen War. The crisis damaged banks and businesses, while the ruble lost much of its value. International investors became more cautious about emerging markets.

The turmoil also contributed to the collapse of Long-Term Capital Management, a highly leveraged U.S. hedge fund. The Federal Reserve helped coordinate a private-sector recapitalization, but it did not directly bail out the fund. Russia’s crisis is therefore related to, but distinct from, the 1997 Asian financial crisis.