The Russian rouble dropped over 10% on Monday, crashing through 64 roubles to the dollar for the first time on record. The country's Micex stock index was also down by 10%.

The falls marked the biggest crash since the 1998 Russian crisis and are likely to trigger further concerns over the Russian central bank's efforts to prevent rouble weakness from affecting the country's financial stability.

Dollar vs the rouble. Bloomberg

Earlier Monday, Russia's benchmark international dollar bond yield climbed another 14 basis points to 6.75%. That is higher than the equivalent borrowing costs of Rwanda, the Financial Times reported.

The central bank increased interest rates by 1% to 10.5% last week in an effort to slow the pace of rouble falls. It has also spent over $70 billion of Russia's foreign-currency reserves in 2014 buying up roubles in the market to prop up the currency. However, the currency has continued to track the oil price downward, with WTI crude falling below $60 a barrel (down from $107 a barrel in June).

However, the development of concern to Russia this time is that the rouble began tumbling despite a rise in oil prices in early trading on Monday. This disconnect could suggest the currency is now being driven by declining domestic sentiment rather than, as some have claimed, algorithmic trading that automatically sold roubles whenever the oil price declined.

While the country still has about $416 billion in reserves and low government debt equal to only 9.2% of GDP, concerns have been focused on Russia's corporate sector. In particular numerous Russian businesses borrowed heavily in dollars over the past few years, and repaying those loans is quickly becoming a much more expensive prospect.

Russian corporates are set to repay some $35 billion in December and over $100 billion in 2015. As the rouble continues its slide, that bill increases in size for companies that conduct most of their activities in Russia.

News broke last week that the Russian state-owned oil company Rosneft, which faces a $6.88 billion loan repayment on Dec. 21, sold 625 billion roubles ($10.8 billion) of six- and 10-year notes into the local market at yields below those on equivalent Russian gov securities.

Bloomberg reported that the debt sale was a back-door refinancing of the company by the Russian central bank, as it simultaneously announced that exchange-traded Rosneft bonds would be eligible to be used as collateral in an unprecedented 700 billion-rouble liquidity auction Monday. The move was unusually swift, according to analysts, and is indicative of the problems facing even some of Russia' s largest companies.

The recent falls could prove even more costly for companies in more parlous positions.

Update

It looks as if the Russian central bank might have attempted to intervene again to defend the currency. Russian broker BCS speculates that the move could have cost the Bank of Russia as much as $350 million. What is certain is that it failed to halt the slide.