Which Russian default and ruble devaluation triggered a global market shock in August 1998?

The 1998 Russian financial crisis involved a sovereign default and ruble devaluation that triggered a global market shock.

Russia had accumulated heavy debt while relying on revenues from commodities, including oil. Falling commodity prices, weak tax collection, and pressure on the ruble made the government’s exchange-rate and debt policies increasingly difficult to maintain.

On August 17, 1998, Russia devalued the ruble, defaulted on domestic debt, and declared a moratorium on some foreign debt payments. The shock spread through international markets and contributed to the collapse of Long-Term Capital Management, a highly leveraged U.S. hedge fund.

The event followed the Asian financial crisis that began in 1997, but it was a separate crisis centered on Russia’s public finances and currency regime.