Moscow - AFP
Russians sighed with relief when the ruble rebounded in recent days, but with painful memories of the financial crisis still fresh, many are rattled and fear the respite could prove short-lived.
The ruble has been sliding for months, but it turned into a plunge at the beginning of the month, with the currency losing nearly 10 percent of its value in the space of just a few days amid renewed tensions over Ukraine and a fall in global oil prices that threatens Russia's finances.
"I was scared," said Natalia, a 26-year-old Muscovite. "At first, I thought it was about (forex) speculation and that it would right itself. But now there is great uncertainty."
The ruble has now shed a quarter of its value against the euro and almost a third against the dollar since the beginning of the year, crimping the purchasing power of Russian consumers and putting the worth of savings in domestic currency at risk.
Natalia, a marketing specialist, said she first planned to protect her savings from devaluation by converting part of her nest egg into foreign currencies, but changed her mind as the ruble's fall eased.
And now? "I haven't got a clue," she said, convinced that the crisis is far from over.
Queues have built up outside some ATMs and currency exchange points amid rising demand for foreign currency.
While not yet widespread, the phenomenon has sparked concerns that the situation is not far from a total panic that could put the ruble into an uncontrollable downward spiral.Russia's central bank -- publicly backed by President Vladimir Putin -- seems to have managed to calm the mood by clarifying its policies and warning speculators of shock interventions in the event of a threat to the financial system.
The ruble rebounded, but did not come close to regaining the ground it lost at the beginning of the month nor enough to stem another rise in consumer prices as inflation is already rising more than 8 percent.
- Crisis avoided, threats remain -
Russia "came within a whisper of a full blown currency crisis," said Chris Weafer, a senior partner at Macro Advisory consultancy. But "some major threats remain," he added.
Russia's economy and particularly its banking sector have been hard-hit by unprecedented Western sanctions imposed over the Kremlin's alleged role in the Ukraine crisis.
With oil prices having plunged by 30 percent since June to under $80 a barrel, Russia's government is under added pressure as oil along with natural gas provides most of the country's tax revenues.
The factors that led the ruble to plummet -- the Ukraine crisis and low oil prices -- "are still in place, which means that the ruble will continue to fall", said Igor Nikolayev, head of the FBK Strategic Analysis Institute, quoted by RBK business news website.
"The economic turmoil will not end any time soon."
Even though Putin's approval rating has skyrocketed in a surge of nationalist fervour fuelled by government propaganda, households have never been so pessimistic about their living standards, according to the latest opinion polls.
The economic turbulence in recent days has revived painful memories of the turmoil that followed the Soviet Union's collapse, and particularly the 1998 government default with the ensuing collapse of the ruble and a series of bank failures.
Ten years later, the country again suffered heavily, this time from the effects of the global financial crisis which saw oil lose three-quarters of its value.
The ruble then fell by nearly 40 percent in six months against the dollar and the economy shrank nearly 8 percent.
- Milder but longer recession -
But compared to the past crises, which were followed by a strong economic rebound, "the key difference is the political element", said Weafer, since no solution is in sight to Russia's standoff with the West over Ukraine.
Even before Ukraine became a full-blown geopolitical crisis the outlook for the Russian economy was not rosy as structural reforms and investment were needed to spur further growth.
In the third quarter of 2014, economic growth slowed to just 0.7 percent year-on-year, according to official data released on Thursday, and both the government and economists warn that the worst is still to come.
"The looming recession will be milder but more prolonged than the 2008-2009 crisis," said HSBC's chief economist for Russia, CIS and the Baltics, Alexander Morozov.
"This time, we see a structural recession (...) with no quick and easy way out of it."
"So tighten your belts, please."