Russia’s stock exchange suffered the 1998 collapse known as the Russian financial crisis. The crisis reached a critical stage in August 1998, when Russia devalued the ruble, defaulted on some domestic debt, and declared a moratorium on certain foreign debt payments.
The government had struggled with weak tax collection, falling commodity revenues, and the burden of maintaining the ruble’s exchange-rate band. The Asian financial crisis also reduced investor appetite for emerging markets and increased pressure on Russian assets. Domestic banks and companies were especially vulnerable to currency and debt shocks.
Russian equities plunged, and the crisis spread through financial markets beyond the country. The ruble lost much of its value, while inflation rose sharply. A common mix-up is to treat the episode as simply another Asian crisis: international contagion mattered, but the default and devaluation were specifically Russian policy events.