Iceland cuts rates, Russia studies loan request

* Iceland slashes interests rates

* Russia agrees to consider loan request

* Belgium, EC say ready to help

By Patrick Lannin and Omar Valdimarsson

REYKJAVIK (Reuters) - Iceland acted to shore up its ravaged economy by slashing borrowing costs on Wednesday and its officials pursued efforts with Russia to get a multi-billion euro loan to help it over its worst financial crisis.

Talks in Moscow ended with Russia agreeing to consider the request for a loan which the North Atlantic island initially put at 4 billion euros ($5.45 billion). No date was set for a new round of discussions.

"We are working thoroughly on the issue to take a final decision," Russian Deputy Finance Minister Dmitry Pankin said in a statement after talks ended.

Russian officials say no details have been agreed although they are looking on the loan request favourably.

Icelandic Prime Minister Geir Haarde said the delegation might stay in Moscow or return to Iceland to continue talks from home as the government grapples with a crisis that has brought down the banking system and made the local currency untradeable.

"But it would be best if this could be resolved now," he told a news conference in Reykjavik.

Importers said on Wednesday the country had food stocks for about three to five weeks but needed quickly to restore a proper foreign exchange market so that importers could get back to normal business and avoid shortages.

Earlier, the central bank cut its main interest rate to 12 percent from 15.5 percent.

In Brussels, European Commission President Jose Manuel Barroso said it was to help Iceland over the financial crisis.

And Belgium offered a lifeline to Kaupthing Bank, where thousands of Belgians have savings, and said Prime Minister Yves Leterme would meet Haarde in Iceland on Friday.

"We are trying to see how we can help through an intervention of the IMF (International Monetary Fund)," Belgian Finance Minister Didier Reynders said on arrival at a European Union summit.

Iceland is due to present a plan to the Washington-based IMF in the coming days and is widely expected to seek funds.