STOCKHOLM Aug 18 (Reuters) - Iceland's central bank said on Wednesday it remained in doubt when capital controls imposed to shelter the battered currency could be removed due to lingering uncertainty about the strength if the financial system.

The central bank said preconditions for liberalising the controls would be in place once the third review of International Monetary Fund (IMF) aid scheme for the crisis-hit country, scheduled for September, was concluded.

"However, there is still considerable uncertainty about the strength of the financial system in the wake of the recent Supreme Court judgments," the bank said in a statement.

"As a result, it is necessary to review the existing capital account liberalisation strategy in view of changed circumstances and the delays that have already occurred."

The central bank cut its key policy rate earlier on Wednesday by a bigger-than-expected 100 basis points to 7.0 percent on Wednesday, following gains for its crown currency and a drop off in inflation.

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