Russia was the country whose 1998 financial crisis led to a major ruble devaluation and a government debt default.
Russia had issued large amounts of short-term domestic debt while government finances were strained by low tax collection, political uncertainty, and falling commodity revenues. Investors became increasingly unwilling to roll over the debt. On August 17, 1998, the government devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic debt.
The ruble lost much of its value, banks failed or faced severe distress, and Russian equity prices plunged. The crisis also contributed to the collapse of the U.S. hedge fund Long-Term Capital Management, whose highly leveraged positions were threatened by extreme market movements. The Federal Reserve helped organize a private-sector response, although it did not directly bail out the fund.
The event is sometimes described simply as a stock-market crash, but it was broader: a sovereign-debt, currency, banking, and market crisis. Russia’s later recovery was helped by rising oil prices and fiscal changes in the following years.