A woman arranges rouble banknotes as she shops at a market in St Petersburg. Photo: Bloomberg

Moscow: Seeking solid investments as their rouble plunges, Russians are rushing to buy coffee grinders, washing machines, cars and even real estate. But for some home owners, whose mortgages are denominated in dollars, disaster has already struck as they now find their monthly debt repayments exceed their incomes.

With the crisis in Ukraine still smouldering and oil prices falling, the Russian rouble has become the world's worst performing currency. If in January this year one Australian dollar would buy 29 roubles, the exchange rate today is 1-57.

Russian President Vladimir Putin during his annual end-of-year news conference in Moscow. Photo: Reuters

"Everybody understands perfectly that it's better to have square metres in your hands than depreciating roubles," real estate manager Maria Litinetskaya told The Moscow Times.

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And indeed there is currently a boom in the rouble-denominated mortgage market, even though interest rates are rising. Russia's largest lender Sberbank is offering a free cat to anyone who takes out a mortgage.

But the problem is that many Russians already have mortgages, denominated in US dollars, because there was a time when the dollar was falling and this seemed an attractive arrangement. According to Central Bank figures, Russians hold mortgages of this kind to the tune of $US2 billion ($2.46 billion) and about 14 per cent of them are now overdue.

One such couple are Masha and Vadik, who took out a dollar mortgage to buy a one-room flat in the centre of Moscow.

"We didn't want to live in a high-rise apartment on the edge of the city," said Masha. "We wanted the atmosphere of the old boulevard."

As long as the economy was stable, Masha and Vadik, each earning 60,000 roubles a month in good office jobs, were able to pay the mortgage. Masha's salary went in its entirety to cover the debt while they lived on Vadik's wages and even managed to take holidays abroad. But now their combined income is hardly enough to keep the bank off their backs.

"I'm so worried, I'm not sleeping at night," said Masha.

The couple did not attend a recent demonstration outside the Central Bank because they were at work but they have in the past joined white ribbon marches against the rule of President Vladimir Putin. At the other end of the social scale, pensioners and poorlypaid state workers are stocking up on basics, such as cooking oil and buckwheat porridge.

"It's very depressing," said one teacher, his triumph at securing a whole case of olive oil evaporating when he realised he had just behaved like a desperate Soviet shopper. "But it's hard not to panic when your wages have halved."

The oil was the last of a stock from Europe, being sold off at old prices. As for buckwheat, a Russian product not subject to sanctions, there is no reason for it to disappear from supermarket shelves but it is becoming hard to find because of panic buying.

According to Echo of Moscow radio, there is rising panic in the Russian cabinet too. The Minister for Economic Development, Alexei Ulyukaev, admitted the government had no plan but was simply reacting to developments. Russia had been hit by a "perfect storm", as structural, cyclical and geopolitical crises coincided, he told the business daily Vedomosti.

Former prime minister Mikhail Kasyanov, now an outspoken critic of the Kremlin, said Russia was going into decline and Mr Putin's days were numbered. Mr Putin needed a "quiet departure through presidential elections", Mr Kasyanov told Reuters.

But Mr Putin, seen in the West as being wounded and all the more dangerous for that, is unlikely to go quietly. A more probable scenario is that a scapegoat will be found for the economic crisis, perhaps the hapless Dmitry Medvedev, who has pedalled along as Mr Putin's "tandem partner" and currently serves as Prime Minister.