Which Russian currency collapsed during the country’s 1998 financial crisis?

The Russian ruble collapsed during the country’s 1998 financial crisis.

Russia faced falling tax revenues, weak public finances, declining commodity prices, and heavy short-term government borrowing. The government maintained a currency band for the ruble, but pressure on the exchange rate grew during 1998. On August 17, Russia devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic debt.

The ruble’s loss of value harmed banks and businesses with foreign-currency obligations. Russian financial markets also fell sharply, and the crisis contributed to the failure or rescue of several financial institutions. The turmoil affected investors internationally, including the highly leveraged hedge fund Long-Term Capital Management.

The crisis followed the 1997 Asian financial crisis, but it was driven by Russia’s own fiscal and structural problems. A later oil-price recovery and policy changes helped the Russian economy stabilize, although the 1998 shock had lasting effects on its banking and political landscape.