Russia was the country that defaulted on its sovereign debt during the 1998 emerging-market crisis.
On August 17, 1998, the Russian government devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic ruble debt. The announcement followed years of fiscal pressure, weak tax collection, falling commodity revenues, and the aftershocks of the Asian financial crisis.
Russia's crisis caused the ruble to lose much of its value and helped trigger international market turmoil. The hedge fund Long-Term Capital Management suffered severe losses soon afterward, prompting a private-sector rescue organized with Federal Reserve involvement. Thailand is often confused with Russia in this context: Thailand helped begin the Asian financial crisis in 1997, but Russia's 1998 default was a later event with different immediate causes.