Russia defaulted on its domestic debt during the 1998 financial crisis that triggered a major stock-market collapse.
On August 17, 1998, Russia devalued the ruble, declared a moratorium on some foreign debt payments, and announced a restructuring of domestic debt. Falling oil prices, weak tax collection, large fiscal deficits, and pressure on the ruble had left the government struggling to maintain its financial commitments.
The crisis caused severe disruption in Russian banks and markets. The ruble lost much of its value, and the Russian stock market suffered an extraordinary decline during 1998. International investors also became more cautious about emerging markets, contributing to broader financial stress.
The event is sometimes remembered only as a currency crisis, but it combined sovereign default, devaluation, and banking turmoil. Russia later benefited from higher oil prices and improved fiscal conditions, yet the 1998 collapse remained a major turning point in its post-Soviet economic history.