In 1998, Russia defaulted.

And with the recent collapse in the ruble and the emergency action from Russia's central bank announced late Tuesday, investors are having flashbacks to 1998 and the global emerging market currency crisis that ensued.

But in a note to clients on Tuesday, Kit Juckes at Societe Generale writes that when making comparisons to 1998, "the differences are more important that the similarities."

Juckes outlines three main reasons why this time it's different:

Emerging market central banks have "vastly larger" currency reserves with which to defend their currencies.

US interest rates, adjusted for inflation, are negative, whereas in 1998 they had risen sharply since 1994. For Juckes, the upshot is that even the thought of Fed rate hikes now has been enough to set off turmoil in markets, but at the end of the day investors will still be attracted to emerging market debt and currencies because they will need more yield than what they are getting in developed markets.

The ruble is falling from a "very great height in real terms ... [the ruble] has only fallen below the pre-1998 peak in the last few days."

Here's Juckes' chart of the ruble's recent slide.

SocGen Rouble More

Société Générale Russia real effective exchange rate vs Brazil, Korea.









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