Russia defaulted on its domestic debt on August 17, 1998, during the Russian financial crisis.
The Russian government announced a devaluation of the ruble, a restructuring of domestic ruble debt, and a temporary moratorium on some foreign debt payments. The announcement followed falling oil prices, political uncertainty, weak tax collection, and pressure on Russia’s foreign-exchange reserves.
The crisis caused the ruble to lose much of its value and damaged Russian banks and businesses. International investors also suffered losses. The turmoil was amplified by the collapse of the hedge fund Long-Term Capital Management, whose large positions threatened broader financial instability.
Russia’s 1998 event is sometimes described simply as a sovereign default, but the announcement involved several connected measures rather than one isolated missed payment. It also differed from Argentina’s later 2001 default, which followed a separate debt and currency crisis.