Which Russian financial crisis caused the Moscow market to plunge in August 1998?

The Russian financial crisis that caused the Moscow market to plunge in August 1998 was the 1998 Russian financial crisis.

Russia entered 1998 with weak public finances, low tax collection, heavy short-term borrowing, and pressure from falling commodity prices. The government relied heavily on short-term treasury bills, known as GKOs, to finance its budget. Investors increasingly doubted that this structure could continue.

On August 17, 1998, Russia devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic debt. The measures triggered a banking crisis and a severe collapse in Russian financial assets. The shock also contributed to the failure of Long-Term Capital Management, a major U.S. hedge fund, after market conditions became exceptionally unstable.

This crisis is distinct from the 1997 Asian crisis, although investor fear and international capital movements linked the episodes.