MOSCOW — From behind the thick glass window at a money exchange in downtown Moscow, Anna Golovachova is well positioned to watch the fall of the ruble, and to contemplate the consequences if it keeps falling.
"The ruble had been stable for years, and now this," Golovachova said, as a few customers lined up to sell stacks of the Russian currency.
The rates posted on the wall tell the story: The shop buys and sells dollars for just under 28 rubles, about an 18 percent drop since August, when it was about 23.
"I'm very worried there will be another default," said the teller, referring to Russia's 1998 monetary collapse, which accompanied a national default on debts.
After two months of taking a battering on its stock markets and banks — the main stock indices are down more than 70 percent since May — concern now is growing in Russia about the national currency.
Analysts aren't expecting a financial collapse like that of a decade ago, but many say that a further ruble devaluation is inevitable, and they worry that the public will overreact.
"Since August, confidence in the ruble has declined dramatically," said Natalia Orlova, a senior analyst at Alfa Bank, one of Russia's 10 largest banks. "Unfortunately, we know from the history of other crises that a panic may trigger devaluation, and it becomes self-fulfilling."
One analyst summed up the government's fears: "They're concerned about a run on the bank."
The value of the ruble is crucial for the government. Prime Minister Vladimir Putin built much of his reputation on returning financial stability to the nation during his eight years as president beginning in 2000, though his critics point to rising oil prices, not his policies, as the key to Russia's turnaround. Now oil has fallen to $55 a barrel this week from a high of $147 this summer.
An added complication is that while it's slipped against the dollar, the ruble recently has risen against the euro — the currency of its main trading partners — which could hurt Russia's export outlook.
Devaluing the ruble, however, would be a blow to the country's leadership and risk even further financial turmoil.
For example, President Dmitry Medvedev's economic adviser, Arkady Dvorkovich, assured the news media on Nov. 5 that "The situation will remain stable . . . the central bank has enough reserves to smooth out fluctuations. No moves in the ruble exchange rate are expected."
When the central bank sanctioned a very small fluctuation six days later — 30 kopeks, about a penny, against the euro and dollar — trading was suspended on both stock exchanges after declines of more than 10 percent.
"It effectively meant they blinked first," said Chris Weafer, the chief strategist at Uralsib, a leading Russian bank. "It had the effect of dropping raw meat into a tank of sharks."
The Russian central bank has at times spent billions of dollars a day propping up the ruble. The nation's currency reserves fell last week to $475 billion from $597 billion in early August, and analysts say that much of that $122 billion has gone toward protecting the currency.
They warn that the government can't keep burning through its reserves, which would run out in little more than a year at the current rate.
For many in Russia, the memory of the 1998 default is still fresh. During that time, the central bank said repeatedly that it wouldn't devalue the ruble. Then it did, as the country's economy shattered.
Down the road from Golovachova's office in Moscow, Sayed Talyabov walked into another exchange this week to convert $5,000 worth of rubles into dollars.
"I'm worried. I think the ruble will fall," said Talyabov, a Moscow worker from Azerbaijan, who stuffed the dollars into his pocket. Nina Mardashvili, the teller who'd given Talyabov his money, said she heard similar comments all day long.
"A lot of people are coming in to trade their rubles for dollars and euros," she said. "People are frightened."
It's not just the man on the street who's concerned.
When the Russian government began doling out loans from its $200 billion-plus financial bailout plan, which started in September, some banks were taking the rubles they received and buying dollars, which put even more pressure on the central bank to support the ruble, said Alexei Moisseev, a senior analyst at Renaissance Capital, one of the country's biggest investment banks.
While the government has clamped down on that activity, some companies are continuing to convert their assets into dollars.
A large Russian electricity company, OGK-3, changed more than $560 million worth of rubles into dollars last week, according to a Reuters interview with the firm's financial director.
Senior government officials, meanwhile, have said repeatedly that the currency is sound.
"Don't expect any surprises related to the ruble exchange rate from us," First Deputy Prime Minister Igor Shuvalov said recently. "They're not going to happen."
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