The ruble was down more than 4 percent in Tuesday afternoon trading in Moscow, to around 66 rubles per dollar. At the same time, the euro went to 78.15 rubles from its previous level of 74.68 rubles per euro on Monday evening.

Stocks in the world's largest oil exporting nation also took a hit, with Russia's RTS index falling by 3.91 percent.

The slump in oil prices has clouded Russia's economic outlook, as the country relies heavily on revenues generated by exporting oil and gas to finance its budget.

The price of Brent crude has plunged from $115 a barrel in June last year to around $47 a barrel on Tuesday.

In late December, Russian Finance Minister Anton Siluanov projected that if a barrel of oil were priced at $60, the Russian economy could contract by 4 percent in 2015, after having achieved 0.6 percent expansion in 2014.

Oil price fall and sanctions have combined to hit Russia hard

Sanctions imposed on Russia by the West due to Moscow's alleged role in the Ukraine crisis have also hurt the country's economic prospects and its financial markets. The ruble reportedly was one of the world's two worst-performing currencies last year, along with the Ukrainian hryvnia.

Russia's currency has lost some 16 percent against the dollar since the start of the year after dropping by around 41 percent in 2014. The ruble touched a record low of 80 per dollar in mid-December before recovering slightly at year-end, but it has been steadily falling since the beginning of 2015.

The currency's sharp drop in value has caused the official inflation rate to spike; it's now over 11 percent.

In a bid to shore up the ruble's value, Russia's central bank announced a sharp increase of its key interest rate in December.

The bank has also intervened in forex markets by selling foreign currencies and buying the ruble to boost the latter's value. As a result, the nation's foreign exchange reserves fell below $400 billion for the first time since August 2009.

In a move aimed at cushioning the impact of Western sanctions on Russian companies locked out of international capital markets, the central bank has also offered dollar and euro loans to banks so they can assist firms that need foreign currencies to finance their operations.

Despite all these measures, investors remain concerned about the impact of slumping oil prices.

President Vladimir Putin said last month that Russia would overcome the current crisis in no more than two years. He has called for new economic initiatives to reduce the country's reliance on oil and gas exports, but he so far hasn't offered a specific plan for an economic restructuring that would achieve that goal.

sri/nz (AP, AFP)