REUTERS/Maxim Shemetov Russia's Central Bank Governor Elvira Nabiullina.

Russia just raised interest rates to 17% from 10.5%.

According to a statement from Russia's central bank, Russia has taken its key interest rate to 17% from 10.5% in a stunning decision made after the collapse of the ruble on Monday.

The Bank of Russia's statement said the decision was driven by the need to limit significant devaluation in the ruble and inflation risks.

The announcement was made at 1 a.m. local time in Moscow.

Last Thursday, Russia hiked rates to 10.5% from 8% in an effort to combat inflation, which rose 9.1% year on year in November.

This surprise announcement from Russia comes after the ruble got absolutely crushed on Monday, losing more than 10% of its value against the US dollar, as the ruble fell to below 64 against the dollar on Monday; earlier this year, one dollar bought about 35 rubles.

Russia's Micex stock exchange also fell by about 10% on Monday as the financial situation in that country continues to deteriorate amid the declining price of oil and the devaluation of its currency.

And earlier this month, Russia's economy ministry projected GDP would contract by 0.8% in 2015. In other words, Russia is falling into recession.

Here's the almost unbelievable chart of the ruble's decline over the last year:

View photos ruble More

Bloomberg.com

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