Which Russian financial crisis event occurred on August 17, 1998?

Russia’s debt default occurred on August 17, 1998, during the Russian financial crisis.

The Russian government announced a devaluation of the ruble, a restructuring of domestic debt and a temporary moratorium on some foreign debt payments. The announcement followed falling oil prices, weak tax collection, political uncertainty and pressure on Russia’s foreign-exchange reserves.

The crisis severely damaged Russian banks and investors. The ruble lost much of its value, inflation increased and many financial institutions became insolvent. International markets were also affected because banks and funds had exposure to Russian debt and to highly leveraged positions elsewhere.

This event is sometimes described simply as a currency crisis, but it combined sovereign debt stress, banking problems and exchange-rate collapse. It also contributed to the failure of Long-Term Capital Management, a heavily leveraged U.S. hedge fund that required an organized private-sector rescue soon afterward.