Russia’s investor credentials remain badly tarnished, despite the partial recovery in global oil prices from their January lows lending support to the ruble, which at the end of June was trading about 25% higher than the nadir hit back in February. In the absence of a stronger recovery in oil prices and the lifting of international sanctions imposed over Moscow’s meddling in Ukraine, Russia’s banks and large corporations will face restrictions on access to international financing and the safety of foreign-owned assets will remain in doubt.

President Vladimir Putin shows no sign of adopting a less aggressive foreign policy, and with a landmark nuclear agreement with Iran creating the potential for a significant increase in the volume of oil entering the global market, Russia’s economic woes are unlikely to be relieved to any significant degree in the near term. Barring a substantive change in the current dynamics, officials will struggle to stem the flight of foreign capital, complicating their efforts to stabilize the economy.

Although political protests are a regular occurrence, there are no overt signs of widespread public anger over the country’s economic plight. For the most part, demonstrations are not well-organized, and most have occurred in areas far removed from the capital, where the fighting spirit of Putin’s opponents appears to have been sapped by the murder of liberal politician Boris Nemstov in February 2015.

Nevertheless, intensifying hardship among the Russian population is a latent danger to Putin’s grip on power. In a telling sign, the Constitutional Court has approved a proposal to hold the next parliamentary election in September 2016, rather than waiting until December. The move means that the height of the campaign will coincide with the traditional summer holiday season, reducing the danger of a repeat of the mass protests that erupted in the run up to the December 2011 elections.

In the near term, economic policy will be marked by a high degree of improvisation as the government seeks to manage the immediate crisis. There is little indication that officials are formulating a more comprehensive policy plan aimed at addressing the vulnerability arising from a lack of economic diversification or creating a more attractive climate for the foreign investment that will be needed to place the economy on a more stable footing over the medium term.