MOSCOW — Russian consumer prices were unchanged on the year for a third straight month in October, the federal statistics agency said Tuesday, opening the door for further interest rate cuts by the central bank.

The zero inflation rate since August has been largely attributed to a weak economy and a slump in consumer demand.

The Central Bank has cut interest rates eight times since April this year in an effort to offset the severe impact of the global downturn and match low inflation levels. It cut the refinancing rate last week from 10 to 9.5 percent.

The Central Bank's first deputy chairman, Alexei Ulyukayev, said earlier this month that the bank may lower rates below 9 percent in 2010 depending on the pace of inflation.

Russia technically emerged from recession in the third quarter as its economy grew 0.6 percent from the previous three months — the first quarterly rise since the crisis struck a year ago. But despite the increase, gross domestic product was still 9.4 percent below year-earlier levels.

The Economic Development Ministry has forecast a 8.5 percent fall in GDP for all of 2009.

High inflation rates and the government's efforts to sustain the ruble in the past made it impossible for the central bank to cut interest rates to boost the economy. With consumer prices staying low and the ruble recovering steadily, analysts say there is greater scope for rate cuts.

Investment bank Troika Dialog said in a note to investors that a 7 percent refinancing rate would be "more appropriate" for the situation as it would spur lending and ease ruble appreciation.

"Monetary policies became too tight considering low inflation," Troika Dialog's chief economist Yevgeny Gavrilenkov said in a recent conference call with investors.

A decision to use interest rate changes rather than currency interventions to control market growth "will contribute to a greater efficiency of monetary policy, and the ruble will have a more stable backing," he said. This will improve the quality of lending and make Russia's economic growth more broad-based, Gavrilenkov argued.

Low inflation will allow rates to be cut further, said VTB Capital's senior economist Alexandra Evtifyeva, but this is not a guarantee that Russia will stop intervening in currency markets and switch to a more flexible exchange rate policy.

"Whether this trend — a flexible monetary policy — is sustainable will depend on external factors, such as capital inflows and oil prices, and how the Central Bank is going to deal with them," she said.

A stable oil price is crucial to protecting Russia from swings in consumer prices, Evtifyeva added.