A case Study of a Currency Crisis: The Russian Default of 1998

Revenue, Investment, and Debt. 
Despite the
prospects for optimism, problems remained. On
average, real wages were less than half of what they
were in 1991, and only about 40 percent of the
work force was being paid in full and on time. Per
capita direct foreign investment was low, and regu-
lation of the natural monopolies was still difficult
due to unrest in the Duma, Russia’s lower house
of Parliament. Another weakness in the Russian
economy was low tax collection, which caused the
N
O V E M B E R
/ D
E C E M B E R
2 0 0 2
1 1
F
EDERAL
R
ESERVE
B
ANK OF
S
T
. L
OUIS
Chiodo and Owyang
Percent
250
200
150
100
50
0
Dec
1995
Mar
1997
Jun
1998
Sep
1999
Dec
2000
SOURCE: IMF.
CPI Inflation
Percent Change over Previous Year
Figure 2
Russian Merchandise Trade Balance 
US$ Millions
Exports
Imports
30,000
25,000
20,000