MOSCOW: The Russian rouble weakened on Monday, slipping beyond 74.5 against the dollar on falling oil prices, after volatility in the country's main export sent the local currency to a more than two-month low last week.
At 0738 GMT, the rouble was 0.3% weaker against the dollar at 74.58 and had lost 0.2% to trade at 88.53 versus the euro.
The rouble came under pressure last week on skittish oil prices after the collapse of output talks between the Organization of the Petroleum Exporting Countries and allies including Russia, or OPEC+.
On Monday, Brent crude oil was down 0.7% at $74.99 a barrel.
Russian rouble firms past 73 vs dollar ahead of OPEC+ meeting
"The local market will likely continue to ebb and flow based on EM sentiment and the commodity markets, though geopolitical risks linger as the U.S. warns of potential retaliation over allegedly Russia-born cyber-attacks," said BCS Global markets in a note.
U.S. President Joe Biden last week increased pressure on Russian President Vladimir Putin to move against ransomware groups operating in Russia, warning the United States is prepared to respond if cyberhacks are not stopped.
The rouble might gain some ground in anticipation of a central bank rate hike to 6.5% from 5.5% next week, Alor Broker analysts said in a note.
In June, annual inflation accelerated to 6.5%, its fastest rate since August 2016, providing Russia with a strong argument to raise rates and adding to concerns that tighter monetary policy might hamper economic growth.
Central Bank Governor Elvira Nabiullina said this month the board may consider raising rates by 25-100 basis points at its July 23 meeting as inflation hovers far above the 4% target.
Investors also have an eye on the U.S. inflation outlook and the speed of the Federal Reserve's future policy tightening ahead of Tuesday's consumer price data and Fed Chair Jerome Powell's testimony from Wednesday.
Russian stock indexes were falling with the dollar-denominated RTS index down 0.6% to 1,625.3 points and the rouble-based MOEX Russian index 0.2% lower at 3,849.9 points.