Russia announced a sovereign debt default during the 1998 financial crisis.
On August 17, 1998, the Russian government devalued the ruble, declared a 90-day moratorium on some foreign debt payments, and restructured domestic government debt. The announcement followed years of fiscal pressure, weak tax collection, falling commodity prices, and political uncertainty.
The crisis spread through Russian banks and damaged investors who had treated government debt as relatively attractive. It also contributed to the collapse of Long-Term Capital Management, a major U.S. hedge fund whose positions were exposed to market volatility and changing credit conditions.
Russia’s crisis is distinct from the 1997 Asian financial crisis, although the events were connected through global investor sentiment. The ruble later stabilized after a sharp devaluation, and Russia’s economy eventually benefited from higher oil prices.