The Russian ruble has recovered to 108 from its low of 114 to the U.S. dollar last Wednesday when the central bank halted all foreign currency purchases for the remainder of the year, but one ruble is still worth less than a penny, and the Bank of Russia’s funds are dwindling.

In October, Russia’s central bank raised interest rates to 21%, while it is grapples with a persistent 8.5% inflation rate.

The Kremlin called the rush to sell rubles an unnecessary “panic,” even though the ruble fell to its lowest level since Russia invaded Ukraine, CNBC reports.

“In my opinion, the situation is under control, and there are absolutely no grounds for panic,” Russian President Vladimir Putin told reporters.

“As for the fluctuation in the ruble exchange rate,” Putin continued, “this is connected not only with inflation processes, it is also connected with payments to the budget, with oil prices. There are many factors of a seasonal nature.”

However, foreign exchange experts called the situation serious. Timothy Ash, an emerging markets strategist at BlueBay Asset Management, said the ruble is “in free fall. A weaker ruble means higher inflation, higher CBR rates as a response, and lower real GDP growth as a result.”

Others attribute the decline in the ruble’s value to U.S. sanctions put in place last week against Russia’s Gazprombank.

However, Mitch Feierstein, CEO of Glacier Environmental Fund Limited, noted that the ruble has fared worse, previously reaching 132 in March 2022 at the onset of the Ukraine war.

“I would not read too much into this; the RUB is not an actively traded currency, does not have the same properties, and Russia’s revenues from commodities sales to China, India other BRICS+ countries remain brisk,” Feierstein said. “It could be due to an imbalance of payments at the end of the year. I don’t think the recent decline means the country is deteriorating because other economic fundamentals remain positive.

“For example: Russia has a GDP surplus and not that much debt,” Feierstein added. “There is no panic, and this is not the end of the world. All eyes are on the December 20 meeting of the CBR when they release any movement in interest rates and other FX (foreign exchange) related policy changes.  Although foreigners cannot actively trade the ruble (RUB), if there is further weakness, RUB would be more of a buy, at a distressed level, than a panic sell.”