Russia Default 1998
About Russia Default 1998
Russia defaulted on 40 billion in domestic debt on August 17, 1998. The ruble was devalued from 6 to 21 per dollar within weeks. The default caused global panic, contributing to the collapse of LTCM. The crisis was caused by low oil prices, weak tax collection, and unsustainable borrowing. The Russian banking system collapsed. Millions of Russians lost their savings. However, the devaluation boosted Russian industry by making imports expensive. The economy recovered quickly, helped by rising oil prices. The 1998 default soured Russia on Western financial advice and increased state control over the economy under Putin.
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