As Russia took a major step to defuse a currency crisis Tuesday, experts said the country’s oil-dependent economy faces three key problems: Falling oil prices, trade sanctions and a continuing flight of investment capital.

In a surprise announcement, the Russian central bank said it would raise its key interest rate to 17 percent from 10.5 percent, effective Tuesday. The interest rate hike was the largest single increase since 1998, when Russian rates rose more than 100 percent, which led the government to default on its debt. The move couldn’t prevent the Russian ruble from tumbling over 19 percent to a record low of 78 per dollar on Tuesday.

“Cumulatively, this is the perfect storm that has affected the Russian economy,” said Ariel Cohen, director of the Center for Energy, National Resources and Geopolitics at the Institute for the Analysis of Global Security in Washington, D.C. “This situation is made worse by the surprise interest rate hikes that have effectively put a break on the Russian economy, effectively sending the Russian economy into a recession.”

Cohen sees three key factors “undermining the financial stability and the rate of the ruble,” he said. First, prior to the drop in oil prices and before the war in Ukraine, Russia saw more than $120 billion in investment capital flee its borders in 2013. Second, Russia -- which derives about half of its government revenue from the sale of oil -- has suffered as global oil prices have slid more than 40 percent in the past six months. The ruble is roughly pegged to hydrocarbon prices.

Finally, there are the trade sanctions ordered against Russia in the aftermath of its invasion of Crimea and Ukraine. Even before the invasions and the resulting sanctions, Russia’s economy had already been forecast to contract 0.8 percent this year, according to the World Bank and the International Monetary Fund. Meanwhile, Russian investors, concerned about a shaky regulatory framework and corruption, were pulling their money out of the country, putting bets on foreign investments.

And Russia made a bad situation even worse by invading Ukraine and taking over Crimea, Cohen said. “When you’re in a hole, the trick is not to dig further. Unfortunately, they kept digging.”

But the sharp decline in oil prices is still Russia’s main problem, Gregory Daco, chief U.S. economist at Oxford Economics, said. “The sanctions are just the icing on the cake. The real brunt of the hit is coming from lower oil prices and the environment in which Russia is highly dependent on oil revenues,” he said.

Ken Wills, a senior corporate dealer with USForex Inc., agrees. “I would say 30 to 40 percent is a result due to Russia’s sanctions, while the bigger part, or about 60 percent, is from declining oil prices,” Wills said.

Now, Russia is facing an economic meltdown, one that has potential to wreak havoc across the global economy. Russia is the sixth largest of the top seven global economies, with a $3 trillion gross domestic product this year. Now with oil prices collapsing, analysts say Russia’s GDP could contract 5 percent or more next year.

Among the countries that could feel the immediate effects, other oil-producing nations that don’t have very strong balance sheets are possible areas of concern. “Norway is one of those, as well as Venezuela, and perhaps West African states like Angola,” Neil Shearing, chief emerging markets economist at Capital Economics, said.

The weakening of the ruble has had a very strong correlation to the decline in oil prices, Wills said, igniting concerns about Russia’s resource-driven economy. 

“The shrinkage of the oil revenue is a more significant factor of where the next domino is going to fall rather than trade. I think we are looking at hydro carbon dependent countries, specifically and high cost producers of oil and gas,” Cohen said. Experts are now looking ahead to Venezuela, Iran, and West African countries, including Angola and Nigeria, as the next potential regions that could suffer a downturn. 

“It’s affecting everyone, and it primarily depends on the depth. If you’re a net importer or exporter of oil, that is primarily determining the direction of your currency,” Wills said. “Russia is definitely in a crisis situation, and the next one to look at in the oil story is Norway and other Scandinavian countries. Just how the fear is rocking the boat there as well.” The biggest rippling effect is the fear factor, as with the Norwegian krona and in other oil-producing nation with big flows of funds out piling into the Japanese yen, the British pound, the euro and the U.S. dollar.

Falling oil prices are a positive for the global economy as a whole because what it effectively does is transfer income from oil producers that tend to save to oil consumers that tend to spend. But clearly there’s obvious losers, and “Russia is one of the biggest losers, along with Venezuela and a few West African states, it could get really ugly,” said Shearing.

Economists expect subdued global growth of around 2.8 percent in 2015, up from 2.6 this year, yet it still remains well below the 3 to 4 percent pace the global economy has previously accustomed to in the past, according to Oxford economics.

“The U.S. will probably be the locomotive in 2015, but if the weight of the wagon is too strong, than the locomotive won’t move forward at a very fast pace,” Daco said.

It leaves economists looking ahead primarily to the Federal Reserve’s final policy meeting Wednesday, where policy makers are expected to discuss the timing of a possible increase in interest rates, which most economists anticipate will happen in the middle of 2015. Following the meeting, Fed Chair Janet Yellen is scheduled to hold a press conference Wednesday at 2 p.m. EST. Economists will be looking for hints as to when the central bank may begin to hike rates. “People thought they might be shifting their stance," Wills said. "I think it leaves them more room to be neutral and continue to watch for when inflation spikes up, and watch for when they do have to raise rates.”