Russia experienced the 1998 stock-market crash and government default commonly called the Russian financial crisis.
The crisis intensified in August 1998, when Russia devalued the ruble, defaulted on parts of its domestic debt, and imposed a temporary moratorium on some foreign debt payments. Russian share prices had already fallen sharply, and the government struggled under high debt costs, weak tax collection, and reduced revenues.
The crisis was worsened by the Asian financial crisis, which reduced investor appetite for emerging markets and weakened commodity prices. Russia’s fixed exchange-rate policy became increasingly difficult to maintain as reserves declined. The ruble’s collapse damaged banks and businesses and caused severe losses for investors.
The Russian crisis also had international consequences. The failure of the U.S. hedge fund Long-Term Capital Management later required a private-sector rescue coordinated by the Federal Reserve because officials feared broader financial instability. Russia eventually benefited from higher oil prices and improved fiscal conditions in the following years, but the 1998 episode remains a major emerging-market crash.