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Opponent Calls for Putin's Exit, Public Panics as Ruble Collapse Shakes Russia's Economy

( [email protected] ) Dec 17, 2014 06:21 PM EST

Russian Economic Crisis
Russian shoppers are scrambling for consumer goods, attempting to put their money into anything more stable than the Russian ruble. (AP)

One of Vladmir Putin's most prominent opponents has warned that the Russian President's days in power are numbered as the country's citizens panic following the catastrophic fall in the value of the ruble, which hit a new low Tuesday despite the Central Bank's efforts to slow the selling.

Reuters reports that Former Prime Minister Mikhail Kasyanov, an ex-ally of Putin who is now an opposition leader, blamed the growing financial crisis on economic mismanagement by the President, who has faced intense criticism for failing in a state-of-the-nation address on Dec. 4 to offer any suggestions to turn around the economy

Kasyanov also said that "Western sanctions over the Ukraine crisis" and a "fall in global oil prices" are at fault for the Russian currency collapsing against the U.S. dollar.

"Russia is going into decline," Kasyanov, 57, told the AP on Wednesday. "2015 is a year in which Putin must make a 'principle' decision."

He added that the President, who has not yet publicly addressed the issue, will likely face protests and should either "further squeeze the political environment"--meaning a crackdown on critics--or accept that "he needs an exit strategy" and agree to hold free elections early.

"As a result of that, (he should have) just a quiet departure through presidential elections. I don't believe he will win presidential elections if they are free and fair," Kasyanov said.

The ruble hit a record low of 80 to the dollar - down a shocking 24 percent - before making a small improvement to trade at 72 to the dollar by late Tuesday afternoon, leading to widespread fear of economic devastation. Russia has reportedly spent more than $80 billion this year trying to shore it up with little success.

According to the Associated Press, the ruble's collapse has caused Russians citizens to buy imported products such as fridges and cars, flocking to stores in a frantic attempt to spend their roubles before prices shoot up.

Meanwhile, the Telegraph reported that richer Russians are quickly investing in the London property market. "I currently have half a dozen Russian clients urgently looking to spend over £20 million ($31m) each on buying a new home in central London," Gary Beauchamp, an estate agent, told the paper.  

"It's easy to use the word, 'panic,' but I think that's what it has been," said Philip Hanson, an expert on the Russian economy at the Royal Institute of International Affairs in London.

"The fall in the ruble is more dramatic than the fall in the price of oil would indicate, and I think there's a crisis of confidence, if you like, a crisis of trust, on the part of everybody involved in the market."

"The situation is critical," Deputy Central Bank chairman Sergei Shvetsov was quoted by Russian news agencies as saying. "We could not have imagined what is happening in our worst dreams."

Analysts said that if the panic ruble-selling continues, the Russian authorities may be forced to impose capital controls--which would they warn would be "bad news for foreign investors who still haven't pulled their money out of Russia."