Russian president Vladimir Putin assured the country’s citizens that the economy would rebound after the rouble's dramatic slide this year.
However he offered no remedy for a deepening financial crisis.
Defiant and confident at a three-hour news conference, Putin blamed the economic problems on external factors and said the crisis over Ukraine was caused by the West, which he accused of building a "virtual" Berlin Wall to contain Russia.
He ignored pressure to say how he will fix an economy facing what his economy minister calls a "perfect storm" of low oil prices, Western sanctions over Ukraine and global financial problems.
The rouble has fallen about 45% against the dollar this year, and suffered particularly steep falls on Monday and Tuesday, but Putin refused to call it a crisis and said it would eventually rise again.
"If the situation develops unfavourably, we will have to amend our plans. Beyond doubt, we will have to cut some(spending)."
But a positive turn and emergence from the current situation are inevitable," Putin said in comments to a packed conference centre that were broadcast live to the nation.
Although he said the recovery might take two years, much will depend on how long the West maintains sanctions on Russia over its role in the Ukraine crisis.
European Union diplomats said the 28-nation bloc would ban investment in Crimea from Saturday over Russia's annexation of the Black Sea peninsula and President Barack Obama is set to sign legislation authorising new US sanctions.
But Putin showed no sign of heeding a call by EU foreign policy chief Federica Mogherini for "a radical change in attitude towards the rest of the world and to switch to a cooperative mode".
Putin said Russia must diversify its economy to reduce dependence on oil, its major export and a key source of state income, but he gave no details and has said many times during 15 years in power that he will do this.
The rouble slipped as he spoke, and was about 2% weaker against the dollar on the day.
The central bank increased its key lending rate by 6.5 percentage points to 17% on Tuesday, and has spent more than $80bn trying to shore up the rouble this year, but to little avail.
Although Putin said the central bank and government had acted "adequately", he chided the bank for not halting foreign exchange interventions sooner, suggesting more decisive action might have made this week's big rate rise unnecessary.
"All this implies pretty big divisions within the administration as to how to react to the crisis and pressure on the rouble," said Timothy Ash, head of emerging market research at Standard Bank in London, adding that heads could roll.
Neil Shearing, chief emerging markets economist at Capital Economics in London, said Putin signalled no change of policy and capital controls remained "a measure of last resort".
"Whatever happens, a deep recession now looms," he said.