MOSCOW, June 21 (Reuters) - The Russian rouble weakened

against the dollar in low liquidity on Friday, extending losses

after its sharpest daily fall since July 2022 in the previous

session, as markets reacted to last week's U.S. sanctions on key

financial systems after some initial appreciation.

The sanctions on Moscow Exchange and its clearing

agent, the National Clearing Centre (NCC), have led to a range

of varying prices and spreads as trading shifted to the over-the

counter (OTC) market on June 14, obscuring access to reliable

pricing for the Russian currency.

On the interbank market, where liquidity can be low as major

Russian banks that have been sanctioned cannot participate, the

rouble traded 1.6% lower at 88.60 by 0817 GMT against the

dollar.

The average dollar-rouble mixed composite rate, calculated

by LSEG and based on data from international brokers and

counterparties, stood at 87.35, demonstrating a wider

spread - the difference between buying and selling prices.

The central bank's official dollar-rouble rate was set at

85.42 for Friday, calculated on the basis of OTC trading.

The rouble strengthened sharply after the sanctions were

imposed amid low liquidity, caused by various technical

difficulties to do with interbank limits when closing FX deals

on the OTC market and as traders closed foreign currency

positions.

Thursday's drop was likely a response to strong appreciation

earlier in the week.

"We assume that the key factor was the strong, oversold

rouble and market participants' expectations of swift actions to

normalise the situation on the FX market by the regulator and

government, which are long overdue," said Promsvyazbank's

Yevgeny Loktyukhov.

Capital controls that have been supporting the rouble since

October were softened on Friday, with the government reducing

the volume of foreign currency revenue that exporters must

convert into roubles to 60% from 80%.

Against the yuan, the rouble shed 1.8% to 12.13, according

to an analysis of the OTC market.

The yuan had surpassed the dollar to become the most traded

currency with the rouble in Moscow before last week's sanctions

were imposed. It accounted for a 54% share of the FX market in

May.

Brent crude oil LCOc1, a global benchmark for Russia's main

export, was 0.3% lower at $85.47 a barrel.

(Reporting by Alexander Marrow; Editing by Shinjini Ganguli)