The head of Russia’s central bank warned Russians on Tuesday morning that they should get used to a new way of life, as the country’s embattled currency continued to plummet. After a brief rally, the rouble hit new historic lows on Tuesday, just hours after an overnight rise in interest rates designed to halt its fall.

“We have to learn to live in a different zone, to orient ourselves more towards our own sources of financing, and to give a chance to import substitution,” said Elvira Nabiullina, the chair of the central bank. She said the interest rate decision had been taken to stem the negative effects of the falling rouble.

The central bank announced the dramatic hike in interest rates, from 10.5% to 17%, after a late-night meeting behind closed doors. Analysts were divided over the move, with some suggesting it was painful but necessary medicine and others claiming it could do further damage to the Russian economy.

The rouble has lost over half its value against the dollar since the year began, with falling oil prices and western sanctions combining to hit the currency. Oil prices fell below $60 a barrel for the first time since 2009 on Tuesday morning, putting further pressure on the rouble. The dollar was trading at about 73 roubles on Tuesday afternoon, compared with 32.8 at the beginning of the year.

The fall in the rouble continues to affect ordinary Russians. With a large share of food and consumer goods imported, purchasing power has been decimated by the large drop in the currency. Russia has enjoyed years of growth under Vladimir Putin’s presidency, with the economy benefiting from high oil prices. Increasing numbers of Russians have got used to a higher quality of life, imported products and foreign travel, which makes the sudden reverse of fortunes come as a shock. Many people have cancelled new year’s holiday plans as they have watched the rouble fall and the price of travel rise accordingly. While analysts say a full-blown crisis is unlikely and that the rouble’s fall may soon stop, they also note that a return to the rates of the beginning of the year is almost unthinkable.

There were no queues for banks or obvious signs of panic in Moscow on Tuesday, where people have been slowly coming to terms with the falling rouble all year, but at certain shops people were rushing to buy up stock imported before the currency fell, and still being sold off at old prices. Some retailers have already raised prices, while others plan to do so soon. Queues were reported late into the night on Monday at Ikea, which has said it will raise prices later this week, while some people were stocking up on basic necessities such as food and medicine.

“I don’t trust the Russian tablets. I’ve always taken imported European ones,” said a pensioner, Nadezhda Kovalyova, who was stocking up on blood pressure pills at a central Moscow pharmacy. “I don’t have much in the way of savings but I thought it was better to spend them and get enough for the next few months, before the prices go up.”

Putin said in his state-of-the-nation address earlier this month that Russians should take advantage of sanctions and the falling rouble to develop domestic industry. However, during the oil windfall years, little of the infrastructure required for entrepreneurship and small businesses to flourish was set up, with corruption and red tape still major issues. Analysts said the increased interest rates would make it even harder for small businesses and potential domestic producers to function, because of the expense of taking out credit.

Early signs on Tuesday were that the rate hike would have little effect on the rouble’s fall, as government ministers and state-run companies began to snipe at each other in the first public signs of a split among the elites over the financial slowdown.

“The central bank’s decision to raise the rate to 17% was forced on them by the current climate and is the right one,” wrote Alexei Kudrin, who was finance minister until 2011, on Twitter. “The fall of the rouble and the stock market is not just a reaction to the low price of oil and to sanctions, but also due to a lack of confidence in the government’s economic policy.”

Kudrin specifically criticised Rosneft, the state-controlled oil giant, for a huge bond issue last week that many have suggested could have contributed to the rouble’s fall.

Rosneft’s spokesman Mikhail Leontiev hit back, saying the central bank itself had been responsible for “pushing Russia towards recession”, and compared the interest rate hike to shooting dead someone who has a small cut to the finger, in order to alleviate the pain.