Iceland cuts key rate half a point to 9 pct

Iceland's central bank cut its key interest rate by half a point to 9 percent Wednesday.

It also cut the current account rate half a point to 7.5 percent.

The seven-day collateral lending rate peaked at 18 percent in October 2008, when Iceland's banking system collapsed under the strain of a global credit crisis.

"If the krona remains stable or appreciates, and if inflation develops as forecast, there should be scope for continued gradual monetary easing," according to a statement from the Monetary Policy Committee of Sedlabanki, the central bank.

"However, as long as there is significant uncertainty about Iceland's …