(Adds comment and details, updates prices)
MOSCOW Aug 8 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
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
"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
Russia in graphics: link.reuters.com/dun63s
(Reporting By Jason Bush, editing by Dmitry Zhdannikov and John