MOSCOW, April 15 Reuters The Russian rouble pared losses on Thursday, after dropping more than 2 versus the dollar in early trade, as the imminent threat of new U.S. sanctions on Moscow, which may target sovereign debt, were largely priced in by investors.

The United States may announce sanctions on Russia as soon as Thursday for alleged interference in U.S. elections and malicious cyber activity, targeting several individuals and entities, people familiar the matter said on Wednesday.

Aggressive new measures targeting Russias sovereign debt were expected, a source said.

The Kremlin said on Thursday it would respond in kind to any new illegal U.S. sanctions on Russia.

By 1013 GMT, the rouble was 1.1 weaker against the dollar at 76.73, falling well away from the twoweek high hit in the previous session and earlier losing more than 2 to 77.55.

It had lost 1 to trade at 91.88 versus the euro , earlier clipping a more than fivemonth low of 92.85.

The sanctions are longawaited and priced in by the market, Sergei Romanchuk, head of foreign exchange and money markets at Metallinvestbank said, adding that news on sanctions increased the likelihood of the central bank hiking its key rate by 50 basis points to 5 next week.

Russia sovereign dollar bonds, OFZ rouble bonds and Russia 5year credit default swaps the cost of insuring exposure to sovereign debt all took a hit earlier on Thursday before trying to regain ground.

The Wall Street Journal, citing sources, said a ban…