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Iceland cuts interest rate

Iceland cuts interest rate
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Iceland’s central bank cut its key interest rate from 17 percent to 15.5 percent. It is the second cut in a month.

The cost of borrowing reached a record 18 percent late last year following a collapse of Iceland’s main commercial banks and currency. The IMF put together a 7.5 billion euro financial aid package to steer Iceland out of its crisis, but the central bank still expects the economy to contract by more than 10 percent this year.