Russia’s economic woes intensified on Friday as the besieged ruble collapsed during morning trading, stoking fears the country was on the brink of a full-fledged currency crisis reminiscent of the 1990s.

The ruble has fallen steadily in recent months amid mounting tensions with the West, but it swerved dramatically earlier this week, plunging more than 10% in 48 hours.

The instability of the currency rekindles uncomfortable memories among Russians, many of whom suffered after the country’s default in 1998, when savings were wiped out and queues formed at exchange points as the ruble rose. was considerably devalued in a context of rampant inflation.

Economic problems in Russia even threaten to undermine the power base of President Vladimir Putin, who has built his political reputation on a promise of stability, restoration of Russia’s great power status and raising living standards. He has made little public comment on the ruble since declines began to accelerate last month.

As the ruble fell on Thursday, there was a growing physical shortage of dollars and euros at Moscow’s banks and exchange outlets, according to Russian media.

The ruble’s weakness has been exacerbated by the Kremlin’s tough stance on the Ukraine crisis, which has prompted investors to flee Russia over fears of another Cold War.

Western sanctions on Moscow for its annexation of Ukraine’s Crimea region and support for pro-Russian rebels fighting the Kiev government have excluded Russian companies from Western capital markets, forcing large debt repayments and raising fears of a slowdown credit.

Once clustered with other vibrant emerging market economies, the Russian economy is now on the brink of recession. Driven by rapidly rising food prices, inflation has jumped to over 8% this year while capital flight is at levels not seen since the 2008 financial crisis.

Dependent on tax revenues generated by commodity exports, Russia has also been hit by an oil price that has fallen more than 25% since June and is now at its lowest level in four years.

Ruble unrest in recent days was sparked on Wednesday by a decision by Russia’s central bank to end artificial support for the currency, reversing a 15-year policy that imposed unlimited market interventions to keep the ruble within a certain range. price range.

In a statement released this week, the central bank said it would now only intervene to support the ruble if there is a threat to financial stability. Amid rumors of an emergency meeting of financial policymakers on Friday, experts said the bank must act to preserve its credibility.

“The longer the regulator waits, the more difficult it will be to find a solution capable of stabilizing the market,” said Dmitry Polevoy, chief economist of ING Bank in Russia. “The panic among the population is difficult to stop. “