By Andrey Ostroukh 

MOSCOW--Russia's beleaguered ruble rebounded suddenly on Thursday, intensifying the focus on what the country's central bank will do when it sets interest rates later in the week and suggesting that those betting against the currency may have been caught out.

The ruble gained about 5.5% against the dollar in the space of few minutes Thursday, with the dollar weakening from a record high of 43.91 to 41.45. It was the ruble's sharpest one-day rebound in several years.

"It was an exceptional day for the ruble. I can hardly remember anything like this in any currency pair," wrote Citigroup in a note to clients.

The battered currency also recovered sharply against the euro, trading around 53.10 from its weakest-ever level of 55.49. The dollar was worth 41.87 in recent trading.

The cause of the sudden move wasn't immediately clear.

"Being a ruble trader is already a particularly tough job on most days but today, it has to be the most grueling one on any trading floor. The moves we have been watching today on the screens have truly been insane, " said Benoit Anne, emerging market strategist at Société Générale.

The central bank will announce its latest interest-rate decision at 1030 GMT on Friday. Some economists think it could raise rates by more than half a percentage point in an effort to support the crumbling currency, the record weakness of which threatens to increase inflation by ramping up import costs.

The central bank has been intervening almost daily this month and has sold more than $28 billion since early October to slow the ruble's drop.

Even with the recovery, the ruble is still near record lows and few analysts see any signs of a lasting rebound, given the heavy toll Western sanctions have had on Russia's economy and the low price of oil, its main export.

"The incredible volatility that we are now seeing is a consequence of the fact that the market was too involved in betting on the ruble's weakness," said Kirill Grishanov, head of financial markets at Promsvyazbank.

"At one point there were only [negative] positions in the ruble left on the market," he said--adding that the selling of foreign currencies by Russia's state-run banks triggered the reversal in the ruble's trend.

The central bank is committed to allowing the ruble to float freely next year, although some speculate that the move could come even earlier. It will retain the right to intervene if it sees risks to financial stability.

"There was a feeling that sticking to long dollar positions was increasingly risky as the central bank may enter the market and chase away the speculative mood," said Sergei Romanchuk, chief trader at Metallinvestbank.

The central bank declined to comment citing a "week of silence" it obeys before the Friday rate decision.

Write to Andrey Ostroukh at andrey.ostroukh@wsj.com