This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine
MOSCOW, Feb 8 (Reuters) - The Euroclear clearing house began converting rouble balances into euros on Wednesday, after it decided to fully withdraw the rouble as a settlement currency, creating an additional hurdle for Russian investors to access frozen funds.
Following Moscow's move to despatch thousands of troops to Ukraine in February last year, the European Union barred Euroclear from serving Russian customers as the West severed ties with the country's financial system.
"Euroclear Bank is not accepting money transfer instructions in roubles (or) any incoming rouble payments, including income and redemption events, on our closed account with ING Bank, our cash correspondent in Moscow," Euroclear said on Feb. 3.
"Following the further withdrawal of the Russian rouble as a settlement currency... we are excluding all securities denominated in roubles from all Triparty transactions with immediate effect and until further notice," Euroclear added in a note on Monday.
Foreign investors from countries that Russia deems unfriendly have managed to offload billions of roubles worth of local debt holdings, selling the government's OFZ treasury bonds at a steep discount, Reuters reported last month.
Euroclear's withdrawal of the rouble could make it difficult to further "localise" OFZs, a financial market source in Russia told Reuters.
Russia's National Settlement Depository (NSD), Russia's equivalent to the likes of Euroclear and Clearstream, did not immediately respond to a request for comment.
Luxembourg in December authorised the release of certain frozen funds or economic resources held at the Clearstream settlement house the NSD, which gave non-sanctioned Russian investors a small window in which to transfer assets from the NSD to other locations. (Reporting by Elena Fabrichnaya; Writing by Alexander Marrow; Editing by Gareth Jones)