Russia announced a sovereign debt default and ruble devaluation on August 17, 1998, during the Russian financial crisis.
The government and central bank widened the ruble’s trading band, then effectively allowed a major devaluation. Russia also declared a 90-day moratorium on some foreign debt payments by private borrowers and restructured domestic ruble debt. The announcement followed falling oil prices, weak tax collection, political instability, and pressure from investors.
The crisis severely damaged Russian banks and businesses. The ruble lost much of its value, inflation increased, and the government struggled to maintain financial stability. Russia had received international assistance, including support from the International Monetary Fund, but the measures did not prevent the August breakdown.
The event is often linked to the wider emerging-market turmoil that followed the 1997 Asian financial crisis. It also contributed to the collapse of Long-Term Capital Management in the United States, although the Russian default was not the sole cause of that fund’s problems.