Russia’s 1998 financial crisis caused the Moscow Stock Exchange to close temporarily amid a collapse in confidence.
Russia struggled with heavy government debt, weak tax collection, falling commodity prices, and the financial aftershocks of the 1997 Asian crisis. On August 17, 1998, the government devalued the ruble, defaulted on domestic debt, and declared a moratorium on some foreign debt payments by private borrowers.
The ruble lost much of its value, banks faced severe stress, and Russian equities plunged. The Moscow Stock Exchange suspended trading for several days as authorities tried to manage the turmoil. The crisis also contributed to the failure of Russia’s short-term government-bond market.
A common mix-up is identifying the event only as the Asian financial crisis. That earlier crisis influenced Russia, but Russia’s 1998 collapse had its own immediate causes, including fiscal weakness, debt pressure, and dependence on commodity revenues.