Anna Arutunyan

Special for USA TODAY

MOSCOW — Russia's ruble resumed its free fall Tuesday as oil prices — the country's main source of revenue — continued to slide and an extraordinary move by the Russian Central Bank failed to halt the currency's steady fall.

"The situation is critical," Central Bank Deputy Chairman Sergei Shvetsov said, as Russia faced its worst financial crisis since a debt default in 1998. "Even in our worst dreams we could not have imagined a year ago that something like this was possible."

Russia's Prime Minister Dmitry Medvedev called a meeting with his top economic advisers while President Vladimir Putin's spokesperson Dmitry Peskov told news agencies the "turbulence" was caused by "emotions and speculative sentiment."

The Russian government's next step is uncertain. One possibility is to impose currency controls that limit exchanges of rubles for dollars and other hard currencies.Some Russian banks started halting currency exchanges on their own Tuesday.

In another sign of the currency's turmoil, Apple announced that it was halting online sales in Russia because of the ruble's volatility.

Late Monday night, the central bank boosted a key interest rate from 10.5% to 17% in hopes investors would hold onto their rubles to get higher returns. The ruble rebounded briefly Tuesday morning, but by midday it plunged anew to a record low of about 72 to the dollar.

In the past year, the currency has lost more than half its value against the dollar, the result of sanctions imposed by the West in response to Russia's intervention in Ukraine and, more recently, plummeting oil prices. On Tuesday, the White House signaled that President Obama would sign congressional legislation that increases sanctions on Russia.

The weaker ruble is stoking inflation by driving up prices for imported goods and creating worsening debts for companies that borrowed from Western banks. Some forecasts see inflation hitting 25% by next year.

Falling oil prices to the lowest levels since 2009 because of a production glut is a huge blow to Russia: Two-thirds of its foreign currency earnings come from oil exports, which finance half its annual budget. Forecasts now project Russia will fall into recession next year.

The price of oil is "absolutely crucial here, and if it declines further that is going to put considerable strain on Russia and its economy." said John Lough, a Russia expert at Chatham House, a London think tank.

It also will put a heavy political strain on President Putin, Lough predicted.

"Three years ago he published a pledge to raise living standards, essentially in return for reduced civic freedoms," he said. "The majority of Russians have been happy to go along with that because their lives have improved significantly through the last decade. That is now in the balance because living standards are going to decline as inflation accelerates, the ruble collapses, sanctions bite, fewer jobs and a lower oil price."

"He is a man under pressure. This is a system under threat," Lough added.

Muscovites lined up at currency exchange booths Tuesday afternoon only to watch the ruble slide further while they waited. "My sister stood in line at a Sberbank for 15 minutes and the numbers ... changed from 70.8 to 82," Kaloi Akhilgov tweeted.

Currency traders offered foreign journalists here as many as 100 rubles to the dollar by evening.

The economic uncertainty was putting a strain on businesses, domestic and foreign. "Honestly it is huge struggle, no one understands what is going to happen tomorrow," said Don Craig, an American who has worked in Moscow since 1993.

Alexander Golovtsov, head researcher at UralSib Asset Management, said the hike in the interest rate is not increasing demand for the ruble, which is why the central bank's action had little effect.

Rather, investor panic is causing the ruble to nosedive, he said. "What's really causing this is that foreigners yesterday and today are selling the ruble, fearing (government-imposed) limits on capital flight," he said.

Putin vowed tough action on speculators during his state of the nation address earlier this month. Some lawmakers have proposed a measure that would force businesses to exchange half of their foreign-currency income into rubles.

The ruble's swoon is creating problems for Putin, who has enjoyed popularity ratings of over 85% following his annexation of Ukraine's breakaway Crimea Peninsula last March. However, a recent poll by the Levada Center, an independent research organization, found that just 6% of Russians are prepared to tolerate shrinking salaries as a result of the annexation of Crimea.

The Association of Retail Companies says food prices have surged 25% this year and are slated to rise another 15% after the holidays because of Western sanctions and a Russian ban on Western food imports imposed in retaliation.

Liza Ermolenko, an emerging markets economist at Capital Economics in London, said the outlook for Russia's economy is bleak, indeed.

But Putin's personal outlook is not as dark, she said. "In terms of the political implications for Putin, his approval ratings are still very high because of his perceived handling of the crisis in Ukraine.

"It's going to take some time before people in Russia realize what is going on with the economy," Ermolenko said.

Contributing: Kim Hjelmgaard