It increased rates from 10.5% to 17% in an attempt to boost the currency's value against the dollar.
The rouble has lost almost 50% against the US dollar this year as falling oil prices and Western sanctions continue to weigh on the country's economy.
The rate rise helped the rouble to 58 to the dollar early on Tuesday but the dollar now buys as many as 73 roubles.
Extraordinary measures'
Last week, Russia raised rates to 10.5% from 9.5%, a move that had little impact. The rouble's slide this week was prompted by fears the US was considering a fresh set of sanctions against the country for its support for separatists in Ukraine.
The chairwoman of the Russian Central Bank, Elvira Nabiullina, said the latest rate rise should curb inflation and encourage Russians to put more roubles into interest rate-bearing accounts.
However, she said she did not expect the rouble's value to be immediately influenced by the rate rise: "The rouble is currently undervalued according to all fundamental parameters and the state of the economy... and the current account. But for the rouble to return to its fundamental exchange rate it would take time."
A note from Moscow-based investment bank Sberbank said: "With these steps, the Central Bank is looking to bring stability back to the [foreign exchange] market, which has been behaving irrationally over the last few weeks. This state of affairs required extraordinary measures from the Central Bank."
The 60 mark is considered a "psychological barrier" for Russia's national currency, says the BBC's Moscow correspondent, Steve Rosenberg.
Neil Shearing, chief emerging markets economist for Capital Economics, said the rate rise "could prove to be a turning point in the 2014 rouble crisis".
"The price, however, will be a further tightening of credit conditions for households and businesses and a deeper downturn in the real economy in 2015," he said.
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Analysis: Steve Rosenberg, BBC News, Moscow
When Russia's Central Bank raised its base rate by one percentage point last week, it was like a doctor giving a seriously ill patient a headache tablet.
Now, it seems, the bank has reached for the defibrillator.
The 6.5 percentage point increase in the key rate to 17% is a desperate measure. But then the situation is looking increasingly desperate.
On Monday, the rouble suffered its sharpest fall in more than 15 years, losing about 10% of its value against the dollar. Moscow's RTS share index plummeted 10%.
On the streets of Moscow yesterday, there was no sign of panic, there were no queues outside banks. But the Central Bank knows it needs to bolster the national currency to prevent panic from setting in. Hence the large rise in the key interest rate.
But there is a risk. High interest rates slow economic growth, and that's not good with Russia on the verge of recession.
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Russia's central bank has previously tried unsuccessfully to stabilise the currency, buying roubles in the markets.
It has spent more than $70bn (£44.7bn) supporting the rouble since the start of the year.
"This decision is aimed at limiting substantially increased rouble depreciation risks and inflation risks," the central bank said in a statement. The decision is effective from Tuesday.
Last week, the World Bank warned that Russia's economy would shrink by at least 0.7% in 2015 if oil prices did not recover. It says an oil price of $70 a barrel would leave it with a fall of 1.5%.
Capital Economics' latest prediction is for a contraction of 2%, should the price of oil remain close to its current price of $60 a barrel.
Raising interest rates has its own risks, as more expensive borrowing can itself slow growth. But it may also stem the tide of money leaving the country.
Oil prices are at levels not seen for five-and-a-half years. US benchmark crude West Texas Intermediate is below $55 a barrel, while North Sea Brent crude is trading below $60 a barrel. Both benchmarks have fallen by almost half since June.
