Russia defaulted on domestic debt in August 1998, intensifying the global market crash.
On 17 August 1998, Russia devalued the ruble, declared a moratorium on some foreign debt payments by private borrowers, and restructured domestic government debt. The announcement followed falling oil prices, weak tax collection, political instability, and pressure on the country's reserves.
The Russian crisis transmitted stress through international markets. Investors became less willing to hold risky assets, and major currencies and stock markets experienced violent moves. The shock also contributed to the collapse of Long-Term Capital Management, whose leveraged positions were exposed to changes in market relationships.
Russia's episode is often called a sovereign default crisis, but its package of measures involved both a debt restructuring and a currency devaluation. It was distinct from the later Argentine default of 2001.