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MOSCOW, March 21 (Reuters) - Finance Minister Anton Siluanov said on Friday that Russia may cancel its foreign borrowing plans for 2014 and reduce issuance of domestic debt if the country's borrowing costs rise.
Western sanctions imposed on Russia over its annexation of Ukraine's Crimea region could make borrowing more expensive and push up bond yields, he said.
U.S. President Barack Obama imposed sanctions on Russian President Vladimir Putin's close allies on Thursday and warned of more moves that would target major sectors of the Russian economy.
"Any sanctions, whatever they are, have a negative impact on bilateral trade, the forecast and the actual economic growth," Siluanov told journalists.
"That's why the imposed sanctions will certainly contribute to the overall negative perception of our country's economy and that has already been reflected in ratings agencies' forecasts."
On Thursday, both S&P and Fitch ratings agencies downgraded to 'negative' from 'stable' their long-term outlooks on Russia's debt.
"It's clear that prices of our bonds can change and the cost of our borrowing could rise," Siluanov said. "If the situation remains as it is now, we will probably cancel our foreign borrowing and reduce domestic debt issuance."
Russia's official plans envisage around $7 billion worth of foreign borrowing this year, following a successful placement of the same amount last year.
Since President Vladimir Putin declared on March 3 that Russia had the right to invade Ukraine, Russian stocks have lost more than $60 billion in market capitalisation and the central bank has spent $23 billion defending the rouble.
Yields on Russian Eurobonds have lost on average 80-100 basis points this month, with the benchmark bond maturing in 2030 trading at 5.2 percent.
"All this will lead to us adjusting our (foreign borrowing) plans," Siluanov said. "We will not borrow at a high cost."
Russia has a hefty $494 billion of foreign currency reserves, enabling it to put off borrowing plans. (Reporting by Darya Korsunskaya; additional reporting by Lena Orekhova; Writing by Lidia Kelly; Editing by Hugh Lawson)