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

The Russian financial crisis caused the Moscow stock market to collapse in August 1998.

Russia devalued the ruble and declared a partial default on domestic debt on August 17, 1998. The announcement followed years of fiscal weakness, falling tax revenues, political instability, and pressure from the Asian financial crisis. Investors had become heavily exposed to Russian government securities, and confidence disappeared rapidly.

The Moscow Times Index fell by roughly 90% during 1998, making the episode one of the most severe stock-market collapses ever recorded. The ruble also lost much of its value, and Russian banks faced widespread insolvencies. The crisis had international consequences: the hedge fund Long-Term Capital Management suffered enormous losses, and the Federal Reserve helped broker a private-sector rescue to reduce risks to the wider financial system. A common mistake is to treat the Russian crisis as purely domestic; falling commodity prices and global investor risk aversion were important background pressures.