Plagued by the Western sanctions imposed over the Ukraine crisis and by falling oil prices, Russia's economy is struggling and the ruble is taking a head-spinning drop, losing a third of its value since the beginning of the year and touching an all-time low last week.
On Monday, the national central bank on Monday decided to freely float the currency and shield it more from speculators.
The move, which aims to spare the central bank from burning billions in reserves on supporting the currency, highlights the extent of Russia's economic decline. The country appears to be sliding toward recession. Investors are pulling money out or seeking the safety of foreign currencies.
For ordinary Russians, the currency's plunge has fueled fears of a spike in inflation, as imports of goods like European cars or U.S. clothes become more expensive.
"With groceries, the prices are rising significantly," said Friyuk. "It never seems like it's hitting your pocket that hard, but by the end of the month you can feel the difference."
The decline in most of 2014 seems to have been gradual enough that Russians weren't overt in their discontent. But a sharp drop this month, when the ruble hit its historic low of 48 to the U.S. dollar on Friday — against 32 in January — may cause anger to rise.
Much of the support for President Vladimir Putin hinges on the prosperity that washed over Russia during most of his years in power. Some observers warn that a long-lasting erosion of purchasing power could fuel social unrest and say the country's financial stability is at risk.
Whereas the central bank previously was trying to keep the ruble from dropping by simply spending dollars to buy up rubles, that strategy has hit a wall. The bank had reserves of $510 billion at the start of the year, but they stand at $400 million now. It spent $30 billion last month alone.
The central bank said Monday it would stop intervening every day in the market to keep the currency up and instead take aim at speculators.
To do that, it said it will limit loans to banks that use the money to go out and buy dollars. Central Bank Chief Elvira Nabiullina also said it will intervene "at any moment in the amount necessary to counter speculative demand."
Investors welcomed the move, as it will spare the country's reserves and should help limit speculative trades against the ruble. The currency strengthened on Monday's news, trading up 2.3 per cent at 45.6 rubles a dollar in late trading.
Though the ruble rose on Monday, analysts say the free float could in fact see it decline over the longer-term. Western sanctions over the fighting by Russia-backed separatists in eastern Ukraine are unlikely to be lifted anytime soon.
"The problem is we still have this big shadow of east Ukraine, the threat of sanctions is hanging over the whole economy and the currency," said Chris Weafer, an analyst at Macro Advisory in Moscow.
The ruble is also expected to come under more pressure next year, when Russian companies and banks will have to pay back about $100 billon in hard currency debts, Weafer added.
The central bank had originally planned to allow the ruble to trade freely next year in what it had hoped would be a sign of its economic prowess. Instead, the move was made out of a desperate need to stanch spending of the national reserves.
Speaking in Beijing, where he attended the Asia-Pacific Economic Cooperation summit, Russian President Vladimir Putin voiced confidence that the central bank's move will help stabilize the ruble. In a bid to assuage investors, he also vowed that the government won't impose any capital controls.
"We have seen speculative fluctuations of the rate, but I think it will end soon in the face of action taken by the central bank in response to action by speculators," Putin said.
Besides spending money to buy rubles in the market, the central bank has also sought to stabilize its currency by steadily raising its base interest rate from 5.5 per cent to 9.5 per cent last month. The higher borrowing rates have not helped the ruble much however, and are in fact likely to weigh further on the economy by making credit more expensive.
In a nod to the challenges ahead, the central bank on Monday revised up its estimates for how much money investors will pull out of Russia this year, from $90 billion to $128 billion. It predicted zero economic growth next year.