Wednesday, Iceland's central bank lowered its key interest by 150 basis points to 15.5%. In March, the central bank had lowered the rate by 100 basis points to 17% from a record 18%, where it had remained since October 2008.

This is the second cut since the crisis-hit country agreed a US$10 billion financial aid with the International Monetary Fund.

The central bank is due to explain the decision later today.

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