President Vladimir Putin on Thursday pledged to diversify Russia’s oil-and-gas dependent economy and said he was confident the weakening rouble will recover.

He blamed Western economic sanctions imposed over Moscow’s support for pro-Russian rebels in eastern Ukraine and the slump in oil prices as the reasons for the recent fall in the rouble.

"Our economy will overcome the current situation. How much time will be needed for that? Under the most unfavourable circumstances I think it will take about two years," he said during his annual end-of-year news conference that lasted more than three hours.

"The current situation has been provoked by external factors, but it's worth noting that we haven't done what we planned to do to diversify our economy," Putin said.

Seeking to soothe market fears that the government could try to prop up the rouble by administrative means such as introducing a fixed exchange rate or obliging exporters to sell part of their foreign currency earnings, Putin said such moves would be counterproductive.

The rouble traded at 61 to the dollar on Thursday, after the government announced emergency measures to support banks and companies seeking to repay foreign-currency debt.

On Wednesday, the Russian currency gained to 63 to the dollar, theh fell back to 72 and then strengthened again to 60. It hit a low of 80 to the dollar on Tuesday, compared with 34 at the start of 2014.

The Russian president insisted  the central bank’s foreign currency reserves were sufficient to keep the economy stable, adding the central bank should not "burn" its USD 419 B reserves.