The Russian president says the government knows exactly who is profiting from speculation against the Russian ruble, and that the government and central bank have tools to punish them.

"The government knows who these profiteers are. It is time to do something about them," Vladimir Putin said during his 11th state of the nation address in the Kremlin’s St. George’s Hall in Moscow.

President Putin delivered a staunch warning to speculators looking to make a profit from the ruble’s downward spiral.

The ruble has fallen more than 40 percent against major world currencies this year, and on Monday, took its sharpest fall since the crisis in 1998 that forced Russia to default. The Russian ruble plunged from 50 to 54 against the US dollar.

"The central bank must do everything to reduce speculative activity in the currency market," Putin said, adding that the time has come for regulators to use tools against those profiting from the demise of the ruble.

On November 10 the Central Bank of Russia allowed the ruble to free float, hoping it would relieve the speculative pressure on the currency.

READ MORE: Putin: Ruble’s ‘speculative jumps’ to stop in near future

Foreign exchange reserves have depleted during the ruble crisis, and stand at about $428 billion. The reserves have lost more than $100 billion in a year as in November 2013 they stood at $524.2 billion.

So far the central bank has ruled out any currency restrictions, such as capital controls.

A big factor in the ruble’s decline is a lack of investment, which Putin said the government will combat by attracting more investment and by bringing money back into Russia, as well as offering big tax breaks for start-ups.

READ MORE: Putin offers amnesty for money coming back to Russia

Other ideas to get the economy moving again include increasing internal investment by 25 percent, decreasing government costs by 5 percent over the next 5 years, and increasing Russia’s high-tech exports by 50 percent in the next 3 years.

“Our economy should work for development, not for capital flight. Our financial market should not be that dependent on external risks,” Putin said.

He conceded that Russia needs to escape from its zero growth trap, and that in the next 3-4 years, Russian economic growth should exceed the global average.

The Economy Ministry forecasts Russia will fall into recession in the first quarter of 2015, however the forecast has been met with criticism from other ministers as being too pessimistic. This would be the first recession since the financial crisis hit and tailspinned the Russian economy into contraction in 2009.

On Wednesday President Vladimir Putin signed into law a 15.5 trillion ruble ($290 billion) budget for next year that only balances with global oil prices averaging $100 a barrel, more than $25 dollars above its current price. The weaker ruble helps balance out the lower oil prices, which would have a minimal impact on the budget.