Which crisis followed Russia’s 1998 government default and ruble devaluation, causing turmoil in global markets?

The crisis that followed Russia’s 1998 government default and ruble devaluation was the Russian financial crisis.

Russia announced a devaluation of the ruble and a restructuring, effectively defaulting on parts of its domestic debt, on 17 August 1998. The announcement came after falling oil prices, weak tax collection, political instability, and pressure on the country’s currency and public finances.

The shock spread through international markets. Investors reassessed risk in emerging economies, and the collapse contributed to severe losses at the American hedge fund Long-Term Capital Management. The Federal Reserve Bank of New York helped arrange a private-sector rescue of that fund.

The Russian crisis is often discussed alongside the 1997 Asian financial crisis, but they were separate episodes. Russia’s later economic recovery was supported by higher oil prices and a weaker ruble, which improved export competitiveness.