Russian President Vladimir Putin will address the media at his annual press conference Thursday as the country faces a crisis that evokes memories of the post-Soviet dystopia of 1998.
Sanctions imposed by the U.S. and Europe after Putin's invasion of Crimea and the tumbling price of oil have pushed Russia's economy into freefall. The ruble sank to a record low against the dollar this week, Russian banks and companies face $120 billion in foreign currency debt payments next year and consumers throughout the country are going on buying sprees to spend their money before its value plummets further.
"This is a moment of truth" for Putin, said Masha Lipman, an independent political analyst in Moscow. "It's no longer possible to go on in the same fashion. The economy is tumbling. The time has come for a definitive choice. Doing nothing won't solve the problem."
The central bank is struggling to stem the undertow. After jacking up interest rates this week to 17 percent from 10.5 percent, it bought more rubles Wednesday and announced changes in foreign-exchange rules to make it easier for companies and banks to survive the debt crunch.
The measures include allowing banks to use a third-quarter exchange rate — before a plunge in oil prices accelerated the ruble's decline — to value risk-weighted assets, according to a statement on the central bank's website. It didn't specify the rate or say how long banks would be allowed to ignore market values in their accounting, meaning they essentially hold off taking losses.