currency exchange rates in Moscow

(Reuters) – Sliding oil prices and a downbeat China factory survey weighed on Asian shares on Tuesday, while the ruble jumped against the dollar after Russia sharply increased its benchmark interest rate in a bid to halt a collapse in its currency.

Activity in China’s factory sector shrank in December for the first time in seven months as new orders declined, adding to a spate of data showing more fatigue in the world’s second-largest economy and heightening expectations that more stimulus will be needed to avert a sharper economic slowdown.

“Concerns about the Russian economy and a slowdown in the Chinese economy are hurting the mood, and the oil price collapse poses a threat to U.S. shale gas production,” said Kyoya Okazawa, head of global equities at BNP Paribas.

MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS extended losses and was down 0.5 percent, after major indexes all logged solid losses on Wall Street on Monday. Japan’s Nikkei stock average .N225 skidded 1.9 percent.

Emerging markets remained under pressure from Asia to Latin America as investors dumped riskier assets, with the Indonesian rupiah IDR=ID skidding to a fresh 16-year low.

The Russian central bank early on Tuesday raised its key interest rate to 17 percent from 10.5 percent, in a move it said was aimed at curbing increased devaluation and inflationary risks.

Sales of oil and gas are Russia’s chief source of export revenue. Tougher U.S. sanctions on Moscow, which were set out in a bill passed by U.S. Congress on Friday, have also added to Russia’s economic woes.

The ruble weakened beyond 60 to the dollar, after rising above 67.00 at one point on Monday when oil prices fell sharply. It last traded at 60.25 to the dollar RUB=EBS.

“The bottom line is that oil prices have to stabilize for the rouble to find a bottom but this move is what the central bank should be doing,” said Jorge Mariscal, chief investment officer for emerging markets at UBS Wealth Management in New York.

Crude prices remained under pressure on Tuesday after OPEC once again said it will not cut oil output despite fears of massive oversupply, and a UAE official nixed holding an emergency meeting of the producer group to support prices.