Russian policy makers are signaling they're prepared tosacrifice economic growth in order to stabilize the ruble.

Last week the Bank of Russia raised its benchmark interest rateby the most in 16 years and created a money-market cash squeeze,helping the ruble strengthen 45 percent from a record low on Dec.16. The consequence of this means the oil producer's economy mayshrink 7.9 percent in 2015, Danske Bank A/S said on Dec. 19,revising a view for a 1.8 percent contraction.

“We're seeing a serious monetary shock, especially next year,”Vladimir Miklashevsky, a strategist at Danske, said by phone thesame day. “What they've done is more serious for the economy thanfalling oil; it's a big negative factor.”