Which 1998 sovereign default triggered a sharp global market shock?

The 1998 Russian financial crisis was the sovereign default and currency collapse that triggered a sharp global market shock.

Russia had accumulated large fiscal deficits while relying heavily on short-term government debt. Falling oil and commodity prices weakened government revenue, and investors became increasingly unwilling to refinance the country’s obligations.

On 17 August 1998, Russia devalued the ruble, announced a restructuring of domestic debt, and imposed a temporary moratorium on some foreign debt payments. The ruble’s collapse damaged banks and businesses and caused severe economic disruption.

The crisis also helped destabilize Long-Term Capital Management, a large US hedge fund. The Federal Reserve Bank of New York facilitated a private-sector rescue in September 1998. Russia’s crisis followed the Asian financial crisis but was not the same event.