Russia is currently facing its worst currency crisis since 1998, when it defaulted on its debt and the Ruble plunged 71% against the Dollar. This time around, Russia is being attacked on two fronts: the sell-off in emerging markets and the collapse in the price of oil. Both trends occurred suddenly and with such force that the economy swung from current account surplus to deficit in a matter of months. Meanwhile, the Central Bank of Russia has spent nearly 1/5 of its $500 Billion in forex reserves to slow the proportional decline in its currency. If the price of oil and the stock market continue to decline in tandem, the Central Bank will no doubt find it increasingly difficult to defend the currency, and a massive devaluation would inevitably follow. The Central Bank has already hiked rates; it is running out of options. Bloomberg News reports:

Today’s central bank decision will prompt "further runs on deposits," wrote [one group of] analysts in a research note today. "Flight from rubles now is the key factor to watch."

Read More: Ruble Devaluation Concern Triggers Stock Plunge, Rate Increase