Russia experienced the 1998 stock-market crash after announcing a ruble devaluation and government debt default.
On August 17, 1998, the Russian government and central bank widened the ruble’s trading band, announced a debt restructuring, and imposed a temporary moratorium on some private foreign debt payments. The measures followed weak tax collection, falling commodity revenues, political instability, and pressure from the Asian financial crisis.
The ruble subsequently lost much of its value, and Russian stocks suffered a severe collapse. Banks and businesses faced foreign-currency liabilities that became harder to repay. The crisis also damaged confidence in emerging markets and contributed to the failure of the U.S. hedge fund Long-Term Capital Management, whose highly leveraged positions required an organized private-sector rescue.
Russia later benefited from higher oil prices and improved fiscal conditions. The 1998 episode is distinct from the 1997 Asian crisis, although the two were linked through international capital flows and investor risk perceptions.