The Russian government assured that the country’s currency crisis was over, but warned of economic hardship ahead. President Vladimir Putin told that his Govt fighting the worst economic crisis since 1998.
The rouble plunged to all-time lows last week on heavy falls in the price of oil, the backbone of the Russian economy, and western sanctions over the Ukraine crisis that made it near impossible for Russian firms to borrow on western markets.
Many Companies suspended shipments and deliveries, especially of imported products, over the past two weeks amid the wild gyrations of the rouble, which briefly plummeted to 80 against the dollar on December 16th.
The rouble slumped to 80 per dollar in mid-December from an average of 30-35 in the first half of 2014. It has strengthened in the last few days to trade as strong as 52 per dollar on Thursday, in part thanks to government pressure on exporters to sell hard currency.
Under pressure from Mr Putin, the central bank initially intervened only hesitatingly to stem the rouble’s rapid decline. The president said last week the bank must not fritter away the reserves which were needed as a security cushion for bailouts in a country under cordon from foreign sanctions.