The Russian ruble was at the center of Russia’s 1998 financial crisis and stock-market crash.
Russia devalued the ruble and defaulted on domestic debt in August 1998. The crisis followed falling commodity prices, weak tax collection, large fiscal deficits, and pressure on the country’s exchange-rate regime. Russian financial markets plunged, and the shock also contributed to the collapse of the highly leveraged U.S. hedge fund Long-Term Capital Management, whose rescue involved major Wall Street firms.
The ruble was not simply a stock index: it was Russia’s national currency. That distinction matters because the crisis combined a currency crisis, a sovereign-debt default, and an equity-market collapse. The government had tried to defend a ruble trading band before abandoning it. International investors had also been affected by the broader emerging-market turbulence that followed the 1997 Asian financial crisis.