JOHANNESBURG, May 27 (Reuters) - Central African Republic has been suspended from the Kimberley Process, a global watchdog set up to halt the trade in 'conflict diamonds', after a rebel coalition seized power there in March, a diplomatic note said on Monday.

The document, signed by current Kimberley Process chair South Africa and sent to the 80 member states, said certified diamond trading with the impoverished and coup-prone central African nation had been halted with immediate effect.

Senior South African diplomat Welile Nhlapo said at the World Diamond Council in Tel Aviv this month all diamond monitoring and controls in the Central African Republic had broken down since the removal of President Francois Bozize.

Diamonds are a major source of revenue for the government in Bangui and even though many stones will continue to leak out onto world markets, the trade ban makes interim president Michel Djotodia's task of staging elections in 18 months even more daunting. (Reporting by Ed Cropley; Editing by Pascal Fletcher)

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