Tue, 16 Dec, 2014 08:23:29 PM FTimes- Xinhua Report , Dec. 16  A woman walks past a board listing foreign currency rates against the Russian ruble outside an exchange office in central Moscow on December 16, 2014. The Russian ruble set a new all-time record low on Tuesday after bouncing back briefly despite an emergency move by Russia's central bank to raise interest rates to 17 percent. Photo AFP-Lehtikuva. Russia's central bank early Tuesday morning announced raising its key interest rate to 17 percent, a dramatic move just after it raised the rate to 10.5 percent days ago.
The central bank said the move, effective from Tuesday, was to try to ease the rouble's recent depreciation.
"This decision is aimed at limiting substantially increased rouble depreciation risks and inflation risks," it said in a statement.
The bank hiked its key interest rate to 10.5 percent on Dec. 11 from 9.5 percent in October.
Russia's rouble has dropped to a new low against the U.S. dollar, as falling oil prices and Western sanctions continue to weigh on the country's economy.
The rouble lost 8 percent of its value on Monday, traded at 63.40 to the dollar, an 8 percent fall in a single day that broke a 15-year record.
Since the beginning of this year, the rouble has lost more than 45 percent of its value against the dollar.
Russia's central bank reportedly has spent more than 70 billion dollars in a bid to back up the rouble since the beginning of the year.
The World Bank warned the Russian economy would shrink by at least 0.7 percent in 2015 if oil prices do not recover.
Raising interest rates has its own risks, as more expensive borrowing can slow down growth, but it may stem the tide of money leaving the country.
Oil prices slumped to lows not seen over the past five years.
U.S.benchmark crude West Texas Intermediate was traded at 55.91 dollars per barrel, while North Sea Brent crude traded near 60 dollars per barrel. Oil prices on both markets have fallen by almost half since June
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