The Russian central bank said it has decided to hike its key interest rate to 17 percent from 10.5 percent.
"This decision is aimed at limiting substantially increased rouble depreciation risks and inflation risks," the central bank said in a statement. The decision is effective from Dec 16.
The central bank added that in order to strengthen the efficiency of monetary policy loans secured by non-marketable assets, guarantees for two to 549 days will be provided at a floating interest rate.
The rouble plunged around 10 percent against the dollar on Monday, its sharpest fall since 1998, and Russian assets sold off across markets.
The rouble jumped against the dollar after the rate hike was announced.
(Reporting by Katya Golubkova; Editing by Leslie Adler)