UPDATE 1-Russia delivers 8th rate cut since April

* Refi rate cut by 50 bps to 10 pct

* Analysts expect more easing

* C.bank says rate cuts to dent appeal of rouble, stocks

(Adds background, details, analyst comment)

By Toni Vorobyova and Yelena Fabricnhaya

MOSCOW, Oct 29 (Reuters) - Russia on Thursday unveiled its eighth interest rate cut since April, as lower inflation enabled it to press on with the easing campaign aimed at setting the recession-struck economy firmly on to the recovery path.

The central bank reduced all key rates by 50 basis points effective from Oct. 30, taking the benchmark refinancing rate down to 9.50 percent.

The move comes a day after data showed that October would likely be the third month of zero inflation, putting investors on alert for another rate cut. [ID:nLS702009]

"The decision was taken...first of all with the aim of additional stimulation for lending activity of the banking sector," the central bank said in a statement.

The latest move takes the cumulative reduction in the refi rate to 350 basis points since April 2009.

"Even though we didn't know the timing, it was expected that the Russian central bank would continue to ease its monetary stance," said Lars Rasmussen, analyst at Danske Bank.

"We see room for further easing in the coming months to 9.0 percent by year-end and 8.50 percent in the first quarter (2010)."

The central bank -- which does not pre-announce the timings of its monetary policy decisions -- said future rate cuts would depend on inflation, lending activity and the situation in currency and debt markets.

An eight-week oil-fuelled URL-E rally has taken the Russian rouble to its highest levels since December versus the dollar RUBUTSTN=MCX, although this week has seen a bit of a correction with investors locking in profits.

"The reduction in the difference in the levels of short-term interest rates in the domestic and external markets due to the lowering of the rates for central bank operations will lead to the reduction of the attractiveness of short-term investments into Russian assets and hinder the accumulation of risks in the currency and stock markets," the central bank said.

For now though, Russian rates are still much higher than rates of 1 percent or less in the rest of the G8, making the rouble a popular carry trade among investors searching for high-yielding emerging market assets.

"We see the increasing likelihood of interest rate cuts as a marginally negative development for the rouble, which could add pressure on the unit," Vladimir Osakovsky, analyst at UniCredit Bank, said in a research note.

"However, we expect a limited market impact as local rates remain relatively high from a regional perspective, and the unit is clearly more influenced by commodities price developments."

The rouble traded at 29.29 versus the dollar and 35.53 against a central bank monitored euro-dollar basket RUS=MCX by 0902 GMT, little changed after the rate decision.

-- For a TABLE on key Russian rates see [ID:nRURATES]