Russia is caught in what one government minister called a “perfect storm” of plummeting oil prices, sanctions and the flight of investors capital.
On Tuesday the rouble rallied, shored up by informal capital control measures. Around 52 will now buy a dollar compared to 63 just a week ago.
Big bills like the family mortgage have risen sharply. Many Russians hold foreign currency-dominated mortgages and have seen their monthly payments spiral.
“ Maybe we won’t be giving presents at the New Year. After planning our family finances our mortgage payments which have doubled have hit our budget really hard,” explained one man.
The crisis has forced families to re-think their financial planning and there is little holiday cheer on the long term horizon.
One respected economist and former finance minister is unequivocal with his prediction for 2015
“We have entered or we are entering a real economic crisis, a full scale economic crisis. Next year we will feel all the effects of it. For the first time since 2000 under Putin and Medvedev’s rule the household income of ordinary people will decrease,” said Alexei Kudrin.
The government put pressure on state owned exporters on Tuesday to sell dollars while sources claimed the central bank had installed supervisors at the currency trading desks of top state banks.