* Finance Ministry may cancel Eurobond ploans worth $7 bln
* Minister Siluanov says any sanctions harmful to economy
* Stocks, rouble, bonds pay for annexation of Crimea (Combines stories, adds comment, background)
By Lidia Kelly and Darya Korsunskaya
MOSCOW, March 21 (Reuters) - Russia's Finance Ministry said on Friday it may be forced to cancel plans to borrow abroad this year, admitting that sanctions imposed by the West are already stinging.
The United States imposed sanctions on Russian President Vladimir Putin's close allies over the annexation of Ukraine's Crimea and warned of more moves that would target major sectors of the Russian economy.
The European Union followed with similar measures against powerful individuals, including freezing assets they hold in the EU.
Since Putin declared on March 3 that Russia had the right to invade Ukraine, Russian stocks have lost on average 10 percent, or more than $60 billion in market capitalisation, and the central bank has spent $23 billion defending the rouble as foreign investors, spooked by uncertainty about where the crisis will lead, pull their money out of Russian stocks and bonds.
"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 envisaged around $7 billion worth of foreign borrowing this year, following a successful placement of the same amount last year.
Russia has a hefty $494 billion of foreign currency reserves and the finance ministry expects a budget deficit of only 0.5 percent of gross domestic product terms this year, enabling it to put off borrowing plans.
PRICE TO PAY
But the central bank has been battling to defend the rouble since Putin's declaration forced it to raise interest rates by 150 basis points to stem capital flight.
The bank said last week it would not introduce capital controls, despite broad expectations that some $50-$70 billion will flow out of Russia in the first quarter of the year, compared with $63 billion in the whole of last year.
But the bank had to halt its planned policy shift to inflation-targetting and fall back on its old role of guarding the rouble.
The rouble's falling value, down by 10 percent against the dollar this year, will boost tax revenues which are estimated using world market dollar prices for commodities, but the price Russia will pay for its economic isolation from the West is high.
"We estimate that every 10-percent fall in the rouble against the dollar raises revenues by 1 percent of GDP," Neil Shearing, chief emerging market economist at Capital Economics said in a note on Friday.
"By contrast, consumers will lose out as they bear the brunt of higher import prices. We think that inflation could rise to 7 percent by the end of this year."
The finance ministry asked the government on Friday to postpone a deadline for moving its surplus tax revenues into one of the country's sovereign wealth funds until October, fearing it could cause further tensions on the markets.
"In the current situation, the withdrawal of the rouble liquidity in the amount of 174.2 billion roubles ($4.81 billion) would serve as an additional factor for reducing the banking sector's liquidity and could contribute to increased volatility in the financial sector," the ministry said in the document. .
Yields on Russian Eurobonds have risen on average 80-100 basis points this month, with the benchmark bond maturing in 2030 trading at 5.2 percent.
"Sanctions may reduce investor confidence in Russian banks that complicate their access to debt and capital markets," Alexandr Danilov, analyst at Fitch ratings agency in Moscow told Reuters on Friday.
"Besides, if investors in Russian stocks and bonds close their positions it can bring a decline in their value."
Visa Inc V.N and MasterCard Inc MA.N have stopped providing services for payment transactions for clients at Bank Rossiya, blacklisted on Thursday by the United States and its subsidiary Sobinbank.
The services were also stopped for SMP bank, associated with two other Russians on the Washington list.
"It's all consequences of the sanctions," Siluanov said. "Some say they will not affect the Russian financial system, and they are already affecting it."
($1 = 36.2354 Russian Roubles) (Additional reporting by Oksana Kobzeva and Lena Orekhova; Writing by Lidia Kelly; Editing by Hugh Lawson/Ruth Pitchford)