Which Russian government action intensified the 1998 global market crash?

Russia’s debt default and ruble devaluation intensified the 1998 global market crash.

On August 17, 1998, the Russian government devalued the ruble, declared a temporary moratorium on some foreign debt payments, and restructured domestic government debt. Investors who had treated Russian bonds as attractive became alarmed, while falling commodity prices weakened Russia’s finances.

The shock spread through international markets and heavily leveraged institutions. Long-Term Capital Management, a major U.S. hedge fund, suffered enormous losses partly because of its Russian and other market positions. The Federal Reserve helped arrange a private-sector rescue of LTCM in September 1998, although the U.S. government did not directly bail it out. The crisis is distinct from the 1997 Asian financial crisis, which began with pressure on Thailand’s baht.