Vladimir Putin vows to rein in people speculating against the rouble

Vladimir Putin said speculators will be prevented from taking advantage of the recent run on the rouble, warning that "we know who these people are, and have the means to rein them in".

The Russian President was making his annual state of the nation address at the Kremlin's St George Hall, during which he also took the opportunity to hit back at Western diplomatic and economic sanctions.

Regarding the currency Putin said: "You know the central bank has floated the rouble, but that doesn't mean the central bank no longer intervenes.

"We have asked the central bank to take measures to make sure that speculators can no longer take advantage. We know who those people are, and we have the means to rein them in. It's time to use these instruments."

The rouble fell by 0.4% to 53.39000 on the dollar after Putin's speech, however – undoing some of the 2.3% gain that it had experienced early this morning.

Putin said that Russia is in store for a "hard time ahead". He said that while inflation would rise because of a weaker rouble, the country's competitiveness would also be increased.

"The rouble of course constitutes upward pressure on inflation. We should take measures to keep the situation with food prices under control. But the weak rouble also makes our companies more competitive, and we need to take advantage through import substitution," he said.

On Monday (1 December), the rouble fell by 6% - its worst daily fall since the rouble crisis of 17 August 1998.

It means the currency has lost 25% of its value against the dollar since the beginning of October and 40% in 2014.