Why did the Russian financial crisis of 1998 affect the Baltic states?

The Russian financial crisis of 1998 had significant repercussions throughout the Baltic states because, following the collapse of the Soviet Union, these nations were still in the early stages of developing their own independent economies, currencies, and foreign markets.1

During the immediate post-Soviet period, the Baltic economies remained heavily linked to Russia and the countries of the Commonwealth of Independent States. Because their trade was initially focused overwhelmingly on these partners, the economic instability triggered by the 1998 crisis in Russia directly impacted the region's financial health.21

While the Baltic states eventually reoriented their trade toward the European Union and other Western markets, the 1998 crisis served as a stark reminder of their lingering economic vulnerability to their eastern neighbor during that decade of transition.12