MOSCOW: The Russian rouble fell sharply early on Monday as oil prices dropped to their lowest since 2003 on market expectations that a jump in Iranian exports would exacerbate a global crude glut.
At 0715 GMT, the rouble was 1.6 percent weaker against the dollar at 78.86 and had lost 1.3 percent to 85.79 versus the euro.
Brent crude oil, a global benchmark for Russia's main export, was down 2.5 percent at $28.2 a barrel after earlier slumping as low as $27.7.
Western countries lifted their sanctions on Iran at the weekend, after a UN watchdog said that Iran had complied with an agreement to curtail its nuclear programme.
Oil prices have come under relentless pressure since the start of the year due to worries over the Chinese economy, hurting commodity-dependent economies such as Russia.
Brent crude is down around 25 percent in 2016, whereas the rouble is down by a more modest 6 percent versus the dollar.
"Oil is a key driving force at the moment, and if its slide continues the FX market will continue adjusting," said Maxim Korovin, a forex analyst at VTB Capital.
Korovin added in a note to clients, however, that the rouble could see some support from exporter forex sales later in the week, when monthly tax payments are due to increase.
Russian share indexes were also weaker on Monday, mirroring the mood in Asia as the oil price slid and weak U.S. economic data at the end of last week added to worries about the state of the global economy.
The dollar-denominated RTS index was down 2.7 percent to 635 points, while the rouble-based MICEX was 1.2 percent lower at 1,588 points.
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