Which Russian financial crisis caused a major global market shock in August 1998?

The Russian financial crisis that caused a major global market shock in August 1998 was the Russian financial crisis.

Russia devalued the ruble and declared a moratorium on some domestic debt payments on 17 August 1998. The government faced weak tax collection, large fiscal deficits, falling commodity prices, and heavy reliance on short-term treasury bills known as GKOs.

The announcement damaged confidence in emerging markets and contributed to stress at Long-Term Capital Management, a highly leveraged U.S. hedge fund. The Federal Reserve Bank of New York helped arrange a private-sector recapitalization of LTCM, but the U.S. government did not directly bail out the fund.

The Russian episode was connected to the wider Asian financial crisis through investor sentiment, yet it was a separate national crisis with its own debt and currency problems. Russia later benefited from higher oil prices and stronger fiscal conditions in the 2000s.