The Russian default was the 1998 crisis event in which the government defaulted on domestic ruble debt.
On August 17, 1998, Russia announced a devaluation of the ruble, a 90-day moratorium on some private foreign debt payments, and a restructuring of domestic government debt. The announcement followed years of fiscal strain, low tax collection, weak commodity prices, and pressure from the Asian financial crisis.
The ruble lost much of its value, banks failed or became insolvent, and investors suffered heavy losses in Russian securities. The crisis also affected international markets through the failure of leveraged positions and the near-collapse of Long-Term Capital Management in the United States.
The term “Russian default” can be misleading if it suggests that every Russian obligation was repudiated. The 1998 measures focused especially on domestic ruble-denominated debt and a moratorium on selected private foreign obligations, while later oil-price improvements helped Russia recover.