Which Russian financial crisis began with the government’s August 17, 1998, debt default and ruble devaluation?

The 1998 Russian financial crisis began with the government’s August 17, 1998, debt default and ruble devaluation.

Russia announced that it would restructure domestic ruble debt, widen the ruble’s trading band, and temporarily suspend some foreign-debt payments. The measures amounted to a sovereign default and were followed by a sharp fall in the ruble’s value.

The crisis followed years of weak tax collection, low oil prices, political uncertainty, and heavy reliance on short-term government securities. International investors withdrew funds, Russian banks faced severe stress, and the government struggled to maintain its financial commitments.

The turmoil also affected global markets. The collapse of the U.S. hedge fund Long-Term Capital Management later in 1998 showed how quickly financial problems could spread through interconnected trading positions. The Russian episode is distinct from the later 2008 global financial crisis.