Russia experienced the 1998 stock-market crash associated with a sovereign debt default and ruble collapse.
On August 17, 1998, the Russian government devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic government debt. These measures followed years of fiscal pressure, falling commodity revenues, political uncertainty, and difficulty maintaining the ruble’s exchange-rate regime.
The crisis severely damaged Russian banks and businesses. It also affected international investors and contributed to the collapse of Long-Term Capital Management, a highly leveraged U.S. hedge fund whose positions were exposed to market turmoil.
Russia’s crisis was connected to the broader emerging-market turbulence of the late 1990s, but it was not the same event as the 1997 Asian financial crisis. Different countries faced different combinations of currency pressure, debt problems, and banking weakness.