* Refi rate cut by to 9.5 percent from 10 percent
* Analysts expect more easing
* C.bank says rate cuts to dent appeal of rouble, stocks
(Adds corporate borrowing, updates with closing prices)
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 recovery path.
The central bank reduced all key rates by 50 basis points effective from Oct. 30, taking the benchmark refinancing rate down to a historic low of 9.50 percent.
The move comes a day after data showed October would likely be the third month of zero inflation, putting investors on alert for another rate cut.
"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."
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.
Russia's economy grew in the third quarter, marking the end of its first recession in a decade, but officials have stressed the recovery is far from sure-footed.
"To give the necessary sustainability to the rising trend (in industrial output), credit support is needed for the real economy sector," the central bank said.
But with bad loans still rising, banks remain reluctant to lend to anyone but the most trusted borrowers -- a trend that Moody's ratings agency expects to continue for some time.
"The growth of new lending will be limited and will, most likely be 10 percent in 2010, with the lion's share of that coming from state banks," Moody's credit analyst Evgeniy Tarzimanov told a conference in Moscow.
Bigger companies such as oil major Lukoil have taken advantage of the improved global climate to seek funds abroad. But the central bank is keen to discourage large-scale foreign borrowing, seen as a key trigger behind the depth of the crisis in late 2008-early 2009.
ROUBLE RISKS
An eight-week oil-fuelled rally has taken the Russian rouble to its highest levels since December versus the dollar, 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 firmed slightly on the day to 29.21 versus the dollar and 35.50 against a central bank monitored euro-dollar basket, taking its cues from a slight rebound in oil and better-than-expected U.S. data.
Russian's MICEX stocks index also took its cues from external factors, adding 1.8 percent and moving back towards recent 13-month highs.
An auction of central bank's OBR bonds attracted over 8 billion roubles of bids for the 5 billion roubles of paper on offer as investors rushed to lock in to a higher yield before the rate cut takes effect.
-- For a TABLE on key Russian rates see (Editing by Chris Pizzey and Andy Bruce)