International oil benchmark Brent was up 1.1 percent to $50.07 per barrel, despite output from the Organisation of the Petroleum Exporting Countries reaching its highest monthly level in recent history in July. A further fall in oil prices could deepen Russia's economic downturn, with growth already hit by lower prices for the country's main export and Western sanctions over Moscow's role in the Ukraine crisis. The International Monetary Fund said on Monday sanctions could cost Russian 9 percent of its gross domestic product. The Fund forecast "weak" economic growth of about 1.5 percent annually in the medium term, compared to Russia's 7 percent yearly growth before the 2008 global financial crisis.
ING economist Dmitry Polevoy said a further slide in oil prices could push the rouble to 68-70 against the dollar. "The real intrigue is how the central bank will act," he said in a note to traders. "Will they see the weakened rouble as a threat to financial stability? If so, everything is possible, from an increase in the limit of FX repurchasing to direct intervention." Russia's central bank last week stopped operations to replenish its international reserves because of a rise in market volatility. The regulator said on Monday there was no set rouble rate at which it would restart buying foreign currency.