Which Russian currency crisis in 1998 caused a major collapse in the country’s stock market?

The Russian ruble crisis caused a major collapse in the country’s stock market in 1998.

Russia faced weak tax collection, falling commodity revenues, large government deficits, and pressure on its exchange-rate system. On August 17, 1998, the government devalued the ruble, defaulted on domestic debt, and announced a temporary moratorium on some foreign debt payments.

The shock devastated Russian financial markets. The ruble lost much of its value, banks came under severe strain, and the Russian Trading System stock index fell dramatically. International investors also became more cautious, while the failure of the hedge fund Long-Term Capital Management later raised fears of wider financial contagion.

The term “ruble crisis” identifies the currency and debt emergency, whereas the stock-market collapse was one of its major consequences. It is distinct from the 1997 Asian crisis, although global investors and financial connections linked the two episodes.