Iceland's central bank today made a twin move to ease pressure on the country's economy after heavy sell-offs in its financial sector and currency last week stoked fears of a bank collapse.

The Sedlabanki, the Icelandic central bank, today appeared to bow to pressure and raised interest rates from 13.75% to 15%, halting the fall of the króna against the euro. The bank said the intention of the rate rise is to tame inflation, which recently hit 6.8%.