Which 1998 Russian event caused a major global market sell-off after Russia defaulted on domestic debt?

The 1998 Russian event that caused a major global market sell-off after a domestic-debt default was the 1998 Russian financial crisis.

Russia devalued the ruble and declared a moratorium on some foreign debt payments on 17 August 1998. The government also restructured or defaulted on ruble-denominated domestic debt. Investors had already been concerned about Russia’s fiscal position, falling commodity prices, and the continuing effects of the Asian financial crisis.

The shock spread beyond Russia because international banks and investment funds held Russian securities and related positions. The crisis contributed to severe losses at Long-Term Capital Management, a large U.S. hedge fund. The Federal Reserve helped broker a private-sector rescue, although it did not directly bail out the fund.

The Russian crisis is sometimes confused with the 1997 Asian financial crisis because the events were closely connected in global markets. Russia’s turmoil was distinct: its defining actions included a ruble devaluation and a domestic-debt default. Oil prices and other commodity prices also mattered because Russia depended heavily on resource exports.