FACTBOX-Iceland holds early election
April 23 (Reuters) - Iceland holds an early parliamentary election on Saturday, expected to result in a win for Prime Minister Johanna Sigurdardottir's caretaker government, a Social Democrat/Left-Green alliance.
The alliance took over after the Independence Party-led coalition collapsed in the face of street protests over its failure to avert a meltdown of the island's economy.
Here are some facts about Iceland and its economy:
* THE ECONOMY:
-- Crisis-hit Iceland's central bank cut its key policy rate for the second time in a month on April 8 as inflationary pressure subsided, and said it saw room for further easing without jeopardising the stability of the crown.
-- The central bank cut its key rate by a larger-than-expected 150 basis points to 15.5 percent, its second easing since an IMF-led bailout sent the cost of borrowing to a record high of 18 percent late last year.
-- The interim government strengthened capital controls in March in an effort to support the crown, which has weakened by nearly 9 percent since the last interest rate cut on March 19. -- Inflation was 15.2 percent in March.
-- Iceland's banking system and currency collapsed late last year in the wake of the global credit crunch, and the Icelandic crown remains shaky.
-- The IMF led a $10 billion financial aid package to steer Iceland out of its crisis, but the central bank said it still expected the economy to contract by more than 10 percent in 2009.
-- Iceland's financial system collapsed last October under the weight of billions of dollars of debt accumulated in an aggressive overseas expansion into financial services.
-- Iceland's financial stature had risen in recent years as its banks expanded rapidly overseas. Investors took large positions in its high-yielding currency, and foreign firms and individuals poured money into local projects.
-- Before the banking sector was deregulated in the late 1990s, the economy was based mainly on fishing, and marine products accounted for the majority of exports.
-- Important exports now include aluminium, ferro-silicon alloys, equipment and electronic machinery for fishing and fish processing, and pharmaceuticals.
-- Before the crisis, Icelandic businesses had invested heavily in the retail and financial sectors in Britain and the Nordic region and in the telecoms and pharmaceutical sectors in eastern Europe.
CAPITAL - Reykjavik
POPULATION - 300,000
ETHNICITY - Some 96 percent of Icelanders are descendants of Norwegian, Scottish and Irish immigrants.
RELIGION - 92 percent of Icelanders are Lutheran. There are small minorities of other Protestants and Roman Catholics.
LANGUAGE - Modern Icelandic is closely related to Old Norse, the language of the original Viking settlers.
GOVERNMENT - Legislative power is vested jointly in the president and the 63-seat Althingi, a single-chamber parliament elected for a four-year period. The Althingi traces its origins to the assembly established by Viking settlers in A.D. 930, making it the world's oldest parliament.
HISTORY: The Vikings' independent commonwealth collapsed in the 13th century when the island came under the rule of Norway and, later, Denmark. Granted home rule in 1918, the Icelanders finally broke from the Danes after the Nazi occupation of Denmark in April 1940. After a referendum, the Republic of Iceland was proclaimed in June 1944.
AREA - 103,100 sq km (39,810 square miles). Four-fifths of the island is uninhabited. Glaciers cover 11 percent of the land and trees are a prized rarity.
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