How does this affect the IS-LM-NX model? On August 17, 1998, the Russian government, led by Sergey Kirienko, declared a default. Technically, the term "default" was not used in the statement, but it contained precisely what is defined by the term. Sovereign default is the bankruptcy of a state, meaning a refusal to make payments on external and internal debts. Now, let's compare this with the text of the statement. Here are its main points: 1. Payments on GKO are suspended, and trading is halted. Government bonds will be reissued into new securities, meaning debt restructuring. 2. A moratorium is declared on the repayment of loans from non-residents for transactions in the futures market and collateral operations. In other words, businesses were also prohibited from paying their debts. 3. The Central Bank shifts to a floating exchange rate policy and expands the "currency corridor" now the dollar can be traded in the range of 6 to 9.5 . Essentially, this is a devaluation. Thus, in just one year, the country experienced both the denomination and devaluation of the national currency. Additionally, it went through three crises at once: budgetary, currency, and banking.