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UPDATE 2-Tumbling Russian rouble hits 4-1/2-year low vs euro as oil prices plunge

(Updates prices, adds Alfa Bank comment)

MOSCOW, Sept 21 (Reuters) - The rouble weakened on Monday, at one point losing 1% to the dollar and hitting a more than four-year low against the euro, as oil prices fell sharply and limited risk appetite continued to weigh on Russian assets.

The threat of more coronavirus lockdowns in some European countries added to geopolitical risks concerning the crisis in neighbouring Belarus and the suspected poisoning of Kremlin critic Alexei Navalny in depressing appetite for the rouble and Russian stocks, which dived to a four-month low.

The rouble fell to as low as 90.4000 against the euro, its weakest since February 2016, and 76.5550 versus the dollar in volatile trade, just shy of a five-month low. It had been as strong as 70 versus the euro and 61 against the dollar in early 2020.

The rouble pared some losses to trade at 89.73 against the euro as of 1503 GMT, and 76.38 versus the dollar .

“Russia is not going to be immune to a global correction, ” said Alfa Bank analysts in a note. Safe haven assets are likely to be back in demand this week as markets hit turbulence with a divisive U.S. presidential election looming closer, they said.

Oil prices fell sharply because of the potential resumption of output from Libya. A global increase in coronavirus cases also added to worries about global oil demand.

Brent crude oil, a global benchmark for Russia’s main export, was down 4.1% at $41.39 a barrel.

Russia’s month-end tax payments that usually lead export-focused companies to convert foreign currency revenues to meet local liabilities could support the rouble as they peak later this week, analysts said.

Russian stock indexes were trading lower, dragged down by falling oil prices, with the dollar-denominated RTS index hitting its lowest mark since May 22, down 3.8% to 1,182.0 points.

The rouble-based MOEX Russian index was 2.9% lower at 2,865.3 points.

Shares in Aeroflot, Russia’s biggest airline, fell 4% after the company announced it would issue up to 1.7 billion new shares in a secondary public offering (SPO).

For Russian equities guide see

For Russian treasury bonds see (Reporting by Gabrielle Tétrault-Farber and Alexander Marrow; Editing by Kirsten Donovan, Hugh Lawson and Jonathan Oatis)