Moscow urged the Russian public not to panic Tuesday, as its battered currency, the ruble, plunged to an all-time low against the U.S. dollar.
The national currency fell below 38 rubles per dollar amid investor worries about the impact of new Western sanctions aimed at punishing Moscow for its role in the Ukraine crisis.
Deputy Russian Finance Minister Alexei Moiseyev attributed the fall to European and U.S. moves to deny Russian banks access to long-term borrowing markets in the West. Addressing reporters, Moiseyev urged calm and said talks are under way with Russia's central bank to ease the crisis.
Analysts say ordinary Russians are worryied the ruble's fall could boost an already high rate of inflation, which reached 7.7 percent in early September, and push the Russian economy toward a full-blown recession.
The dollar has so far risen 1.70 rubles in value this month.
U.S. President Barack Obama and European Union leaders last week slapped Moscow with a new round of sanctions, targeting Russia's biggest financial institution, Sberbank. The new penalties also block Russian energy companies from using U.S. services, goods and technology on deepwater and shale oil extraction.
Both Washington and Brussels say the penalties are a direct result of Russia's ongoing role in the Ukraine conflict.
The Obama administration and the European Union began imposing travel sanctions on Moscow in March, in response to Russia's move to seize control of Ukraine's Crimean peninsula. Washington moved to economic penalties in late July, a short while after a Malaysian jetliner with 298 people on board was shot down over Ukraine airspace by what Western analysts say was a Russian surface-to-air missile.
Moscow has denied supplying the missile battery to pro-Russian separatists and has vowed to retaliate against the Western penalties.
Some information for this report comes from AFP and Reuters.