WASHINGTON (AP) — The Bank of Russia has raised its key interest rate to 17 percent from 10.5 percent in a desperate move to boost its currency and rescue its troubled economy.

The action announced Tuesday in Moscow comes after the ruble's value has sunk roughly 50 percent since January, battered by Western sanctions imposed over the conflict in Ukraine and plunging worldwide oil prices. The falling ruble threatens to escalate Russia's inflation to dangerous levels and paralyze the economy.

The central bank's aggressive move illustrated the magnitude of the perils confronting Russia. It reflected fears that the ruble's decline could trigger consumer panic, incite a run on banks and deepen Russia's economic problems.

By raising interest rates, the bank hopes investors will find it more financially appealing to keep their money in Russia.

"They did it as a lure to encourage people to keep their rubles at home rather than continue to flee the currency and the country," said Barry Eichengreen, an economist at the University of California, Berkeley. "It's a way of buying time. It doesn't solve any of the underlying issues that the Russian economy has" — falling energy prices, Western sanctions and widespread corruption.

Such challenges are especially difficult because Russia's economy relies so heavily on petroleum revenue and lacks the diversification to withstand severe economic downturns.

That tends to leave the economy at the mercy of global financial markets, where oil is priced in dollars. The average price of a barrel of oil has dropped below $56 from a summer high of $107. The Russian government recently downgraded its growth forecast for next year, predicting that the economy will sink into recession.