After posting early gains, the rouble came under pressure as the finance ministry cancelled one of three auctions of its OFZ bonds and sold just 3.3 billion roubles of paper in two other auctions, a fraction of the 25.1 billion roubles on offer.
The rouble hit 67.80 versus the dollar, its weakest level since Nov. 14, and slid to 77.44 versus the euro, a level last seen on Sept. 26.
"The auctions took their toll (on the rouble). But things are not that simple: We have not yet fully priced in yesterday's plunge in oil prices, plus someone could have ditched roubles in the thin market ahead of holidays," said a dealer at a Western bank in Moscow.
Brent crude oil, a global benchmark for Russia's main export, was up 1.7 percent at $57.20 a barrel after falling to $55.89 on Tuesday, its lowest since October last year.
By 1505 GMT the rouble was down 0.7 percent at 67.73 to the dollar, down 0.7 percent on the day. Versus the euro, the rouble was 1.2 percent weaker at 77.37.
Month-end taxes in Russia could limit the rouble's downside as export-focused companies usually convert their revenues into roubles in the second half of every month to meet local duties.
The central bank can also step in next year and raise interest rates again after hiking the key rate to 7.75 percent last week, when it cited risks of higher inflation.
Weekly consumer inflation rose 0.2 percent in the latest week, data showed on Wednesday. This suggests that annual inflation exceeded the central bank's target of 4 percent, said Kirill Tremasov, head of research at Loko-Invest.
"This December we are seeing the highest acceleration in inflation since 2014," said Tremasov, a former head of the forecasting department at the economy ministry.
This opens the way for more rate hikes by the central bank given the rouble's depreciation and the drop in oil prices, Tremasov said.
Looking forward, the rouble can weaken further to 70 versus the dollar next year because of lower oil prices, said Mikhail Poddubsky, an analyst from Promsvyazbank.
Russian stock indexes were mixed.
The dollar-denominated RTS index was down 0.8 percent to 1,097.7 points, while the rouble-based MOEX Russian index was 0.3 percent higher at 2,358.4 points, buoyed by the weaker rouble.