Russia announced a debt default in August 1998 during the Russian financial crisis.
On 17 August 1998, the Russian government devalued the ruble, declared a moratorium on some private foreign debt payments, and restructured domestic government debt. The announcement followed falling oil prices, weak tax collection, political uncertainty, and pressure on Russia’s currency reserves.
The crisis caused the ruble to lose much of its value and contributed to the collapse of the hedge fund Long-Term Capital Management. The U.S. Federal Reserve helped coordinate a private-sector rescue of the fund because its highly leveraged positions were connected to many financial markets.
Russia’s 1998 crisis is sometimes described simply as a currency crisis, but it combined sovereign debt restructuring, banking distress, and ruble devaluation. It was distinct from Argentina’s later 2001 default.