As United States continues imposing series of international sanctions over Russia after Moscow's actions in Ukraine, ruble is in decline and the country is facing a serious economic situation like 1998. One fears this economic crisis could weaken Russian President Vladimir Putin's grip on power.
Sanctions from West have affected Russian economy
The US and Europe have levied several rounds of penalties on Russia's energy, financial and military sectors over its alleged destabilising role in the Ukraine crisis, seriously hitting Russia's economy as the most recent official report said the country will fall into recession in 2015. Ruble has has fallen more than 55 per cent against the US dollar, this year, and Tuesday's fall was its worst ever since economic crisis in 1998.
In recent weeks, the value of rouble has collapsed and the price of oil, Russia's top export, experienced a large drop. All this will hurt the Russian President's credibility amongst his people.
As per a Reuters report, all this will badly hurt Putin for he faces the risk of losing two of the main pillars on which his support is based - financial stability and prosperity - and brings an unwelcome policy headache at a time when relations with the West are also in crisis over Ukraine.
The eight-month-old conflict between government forces and pro-Russian separatists in eastern Ukraine has left at least 4,634 dead and 10,243 wounded, and displaced more than 1.1 million people, according to new UN figures.
What is US saying?
Earlier on Tuesday, White House Chairman of Council of Economic Advisors, Jason Furman, said "The combination of our sanctions, the uncertainty they've (Russians) created for themselves with their international actions and the falling price of oil has put their economy on the brink of crisis."
"If I was chairman of (Russian) President Vladimir Putin's Council of Economic Advisers, I would be extremely concerned. They are between a rock and a hard place in economic policy," he said.
"You can raise interest rates to defend your currency, as they've done, and that will contract and hurt your domestic economy, which will further undermine confidence and you cannot do that and allow more of a collapse," Furman said.
"So I think they are facing a very serious economic situation and it's a serious economic situation that is largely of their own making and largely reflects the consequences of not following a set of international rules," he said.
Kremlin terms it anti-Russian sentiment
Russian Deputy Foreign Minister Sergei Ryabkov said on Saturday that the new US legislation testified to "the anti-Russian sentiments as well as attempts to impose decisions on us that are categorically unacceptable".
Will the present economic crisis hit Putin's prospects?
Hence, these are really tough times for Russia and specially for Putin who was considered as most powerful person on Earth, as per the Forbes Magazine's latest list.
Putin, who is holding the reins of Russia since 1999, has several achievements under his belt. He has steered the country through the previous economic crisis. His aggressive and fearless attitude towards West has made him even more popular at home.
Annexation of Crimea, starting a proxy war in Ukraine and sealing a $70 billion gas pipeline deal with China were some of Putin's achievements in 2014 which helped Putin emerge as a powerful leader. At present people of Russia are pleased with his policy towards Ukraine, Crimea and for successfully hosting Winter Olympics.
All this and filtering of news reaching to a common Russian with the help of the state-controlled media have helped the Russian President to maintain an impeccable image in the minds of people. Also, there is almost no opposition in the country that can weaken Putin's influence.
Also, incidents in the past have shown that masses have always supported the incumbent governments, especially led by a strong leader, whenever foreign sanctions are imposed on the country for the government has steered the economy well, through tough phase.
Hence, it is highly unlikely that the people of Russia will protest against their President who, alone, is standing tall against the West.
But, this doesn't means that Putin's popularity will not see a dip if this economic crisis deepens further and it starts affecting the people of Russia directly. Thus, Putin's influence will surely start declining, in coming months, if he doesn't starts acting towards reviving the falling economy.