Iceland Raises Key Rate by 6 Percentage Points

Iceland’s central bank raised its key interest rate by 6 percentage points to 18 percent on Tuesday, two weeks after it had eased policy to soften the impact of the country’s financial meltdown.

The move, which one economist called extreme, was the latest by authorities to prop up the country’s frozen currency and markets, offering investors a high return for putting money back into the North Atlantic island’s crippled financial system.

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