The Russian ruble was sharply devalued during Russia's 1998 financial crisis and sovereign debt default.
Russia had maintained a managed exchange-rate band, but falling commodity prices, weak tax collection, political uncertainty, and the effects of the 1997 Asian financial crisis put intense pressure on its finances and currency.
In August 1998, the government devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic ruble debt. The exchange-rate collapse damaged banks and contributed to a major domestic recession.
The ruble crisis is sometimes confused with the Asian crisis itself, although the Russian episode occurred later and had distinct causes. The crisis also contributed to the failure of the U.S. hedge fund Long-Term Capital Management, which was heavily exposed to market volatility.