The Russian ruble has hit a series of fresh record lows in the past few days. The US dollar now buys more than 40 rubles marking a fall of almost a fifth since the start of the year. Only the Argentinian peso has done worse against the dollar in 2014.
The ruble is also around 45 to its euro-dollar basket, the main gauge used by the Russian central bank, which allows the currency to move in a trading band. The central bank has spent almost $2bn on buying rubles to try to temper the decline in the past few days, the heaviest intervention since March.
Russia's economic problems "appeared long before the annexation of Crimea", said The Economist. The growth model of recent years was to funnel profits from oil and gas sales into the consumer economy. But that had "petered out",and Russia badly needed "innovationand investment" to move up a gear.Now, thanks to sanctions and the falling oil price, the economy is on the slide.
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As political tension and the poor backdrop prompt capital to flee the country, the currency falls, fuelling inflation, which is already uncomfortably high at 8%. Moscow's ban on importing food from states that imposed sanctions hasn't helped, as it has cut food supplies, said Andrey Ostroukh in The Wall Street Journal.
To stem the exodus of foreign money, and squeeze out inflation, the central bank has had to raise interest rates three times this year, and another hike is expected soon. That has further undermined growth.
The sanctions have slashed Russian firms' access to the capital markets, which raises the prospect of a corporate credit crunch, added Kathrin Hille in the Financial Times.
They have enough liquidity to meet their 2015 debt obligations, according to credit-rating agency Moody's, but 2016 and 2017 will be a problem if they don't regain international markets. Meanwhile, they have to repay $134bn of external debt between now and the end of 2015, which will see more money leave Russia.
Meanwhile, the price of oil has fallen well below the average level factored into Russia's 2014 budget.
In short, said The Economist, Russia risks a "cycle of low or zero growth, high inflation, and ruble devaluation". With national security providing a pretext for more state interference in the economy, a sustainable recovery is further away than ever.
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