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MOSCOW Aug 8 (Reuters) - The rouble hit a four and half month low against the dollar on Friday and Russian shares extended losses as an investor exodus gathered pace, with tensions in Iraq adding to concerns about Ukraine and a domestic food import ban.
At 0720 GMT, the rouble was 0.55 percent weaker against the dollar at 36.45 and 0.71 percent down versus the euro at 48.84. It was 0.66 percent weaker at 42.04 against its dollar-euro basket.
The rouble's weakening comes after the introduction of a ban on most western food imports, with investors choosing to ignore the positive implications for Russia's balance of payments of a likely cut in spending on imports.
"The import ban is marginally positive in a 6-12 month period as a general factor affecting the current account, but currently capital outflows are still on a higher scale than this," said Dmitry Polevoy, Russia economist at ING.
"So currently nobody cares about the current account, nobody cares about the trade balance, probably nobody even cares about the high carry (high interest rates) in Russia. People who just want to get off the country, off Russian assets, are trying to do it."
He estimated that the ban on western food imports would save Russia around $800 million a month, a figure probably less than the increase in capital flight as investors flee rouble assets.
Analysts polled by Reuters at the end of last month predicted that capital outflows would reach $118 billion this year, almost double last year's figure.
Russian stocks added to steep declines from earlier in the week linked to escalating international tensions over Ukraine.
The losses were concentrated in the dollar-denominated RTS index, dragged down by the weaker rouble.
At 1120 GMT, the RTS was down 0.7 percent to 1,550 points, while its rouble-based peer MICEX was down 0.2 percent at 1,335 points.
"We expect that in the medium term the Russian equity market will continue its declining tendency against the background of uncertainty about the consequences of restrictive measures (on imports) and the absence of any positive events able to counteract the negative (trend)," Veles Capital analyst Yulia Frumkina said in a morning note.
For rouble poll data see
For Russian equities guide see
For Russian treasury bonds see