STOCKHOLM Aug 18 (Reuters) - Iceland's central bank cut its key interest rate by 100 basis points to 7.0 percent on Wednesday, following a stronger crown currency and weaker inflation.

The Sedlabanki also said it would cut its deposit rate to 5.5 percent from 6.5 percent.

Sedlabanki has already brought borrowing costs down from a record 18 percent last year in a bid to support the stricken economy and analysts had said it had room to lower rates by at least another 50 basis points to stimulate growth further.

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