UPDATE 1-Ukraine central bank cuts main interest rate to 15.5%

Ukraine's central bank on Thursday lowered its main interest rate for the fourth time this year to 15.5% from 16.5%, a steeper than expected cut.

The central bank cited a more rapid decline in underlying inflationary pressures as a reason for the cut. It said inflation will slow down further in October from 7.5% year-on-year in September. A Reuters poll of analysts had forecast a cut to 16%, with only two out of 15 respondents predicting a sharper decrease to 15.5%.

Interest rates have been in double digits since Ukraine plunged into turmoil following Russia's annexation of Crimea in 2014 and the outbreak of a Moscow-backed separatist conflict in the eastern Donbas region. But inflation dropped into single digits last year, giving the central bank more breathing space. The central bank, called the National Bank of Ukraine (NBU), wants to bring inflation down to 5% and to gradually lower interest rates to 8% by 2021.

"The NBU continues the cycle of monetary policy easing as inflation is firmly declining towards the target of 5%," it said in a statement.

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