The 12% plunge in the rouble in a single day on Monday forced the Russian central bank to increase the one-week repo rate by 650 basis points to 17% taking the total increase in the benchmark interest rate this year to 11.5%.
The rouble reacted to the central bank move rebounding from the record low of 66/dollar touched on Monday by 10% to 60/dollar.
The new rate is effective 16 December. The hike is the highest since the 1998 default and the sixth this year after the central bank spent more than $80bn of its reserves to stop the free fall in the rouble.
At the lowest on Monday, the Russian unit was more than 50% down against the dollar from 2013-end.
The slide in oil prices and the economic and trade sanctions imposed by the West on Russia for its role in Ukraine are behind the sharp depreciation in the currency leading to inflationary pressures in a big way.
The decision by the Organisation of Petroleum Exporting Countries (Opec) not to cut oil output against the interest of Russia and some others in the group aided the plunge in the commodity which has been battered by weak demand outlook despite relatively higher supply.
The 15 February delivery WTI (West Texas Intermediate) fell to a new five-year low near $56 on Monday as Opec reiterated its stance on output.
The commodity continued the slide on Tuesday as data from the world's second largest economy showed manufacturing activity is contracting there.
The China HSBC manufacturing PMI fell below the 50-mark to 49.5 for December, data showed. Analysts were expecting no change from the November reading of 50.