Russia declared a default and devalued its currency during the 1998 Russian financial crisis.
On August 17, 1998, the Russian government and central bank announced a de facto ruble devaluation, a restructuring of domestic debt, and a temporary moratorium on some foreign debt payments. The announcement followed years of fiscal pressure and falling confidence.
Russia was especially exposed because government finances depended heavily on tax collection and commodity revenues, while investors held large amounts of short-term government debt. The Asian financial crisis and falling oil prices added to the pressure. The ruble lost much of its value, and banks and businesses faced severe disruption.
The episode is also associated with the collapse of the hedge fund Long-Term Capital Management, whose leveraged positions created broader concerns about financial stability. Russia’s crisis was therefore both a domestic fiscal shock and part of a wider emerging-market turmoil.