Which Russian government action marked the center of the 1998 Russian financial crisis?

The center of the 1998 Russian financial crisis was the government’s debt default and ruble devaluation.

On August 17, 1998, Russia announced a de facto devaluation of the ruble, a temporary moratorium on some foreign debt payments, and a restructuring of domestic ruble-denominated debt. The announcement followed falling oil prices, weak tax collection, political uncertainty, and pressure on Russia’s exchange-rate regime.

The ruble subsequently lost much of its value, inflation surged, and banks faced severe stress. Russian government bond markets were disrupted, and international investors suffered losses. The crisis also contributed to the failure of Long-Term Capital Management in the United States, whose highly leveraged positions were exposed to market turmoil.

The event is sometimes described simply as a sovereign default, but the policy package included both debt restructuring and currency devaluation. Russia later benefited from higher oil prices and economic adjustments, helping its recovery in the following years.