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Russia's central bank has issued a warning that it is ready to intervene to stop a precipitous drop in the value of the ruble. "In recent days there have been signs of panic in demand [for hard currency] which creates the preconditions for forming risks to financial stability. In these conditions the Bank of Russia [central bank] is ready to increase hard currency interventions at any time and also deploy other instruments on the financial market it possesses," the press release read.

In morning trading, the ruble had weakened by 3% to hit new historical lows of RUB48 against the dollar and RUB60 to the euro. As rumours of an emergency central bank meeting spread, later confirmed by the press release,  the ruble leapt in value. By 3pm the ruble had surged 1.9% against the dollar to reach RUB45.94 and 2% against the euro to reach RUB56.88.

On November 5, as part of a transition to a ruble free float slated for January 2015, the central bank announced it would cut total daily interventions to only $350m. At the same time, the bank warned it could undertake a major intervention if financial stability was threatened.

According to the press release, the drop in the value of the ruble taking place over recent months is the result of fundamental factors, primarily the drop in the price of oil and limited access to international capital markets as a result of western sanctions. In order to slow down the devaluation of the ruble, the central bank said it had spent $30bn in October alone from hard currency reserves in interventions, as well as raising on October 31 raising the key interest rate by 150 basis points and introducing hard currency repo auctions.

"The changes to the exchange rate policy are directed towards the ruble quickly finding a balanced value, reducing the loss of reserves, and preventing the creation of expectations of persistent devaluation. In addition, this decision will help prevent foreign currency market operations causing a structural liquidity crisis. The flexibility in the exchange rate will help absorb external shocks to the financial sector and to the economy as a whole," the press release read.

But, according to the central bank, the "process of adaption" to the new exchange rate policy was causing "volatility" on the market, which should only last until the ruble finds its new value, which moment the central bank sees as close at hand. "According to estimates of the Bank of Russia (…) further weakening of the ruble is not necessary for the balance the national accounts," the bank said