SYDNEY—Australia's central bank surprised financial markets by keeping interest rates steady in February, citing reduced risks in Europe for the decision, which sent the Australian dollar surging to a fresh six-month high.
Reserve Bank of Australia Gov. Glenn Stevens said in a statement the acute financial pressures that were affecting Europe's banks in late 2011 had eased "considerably." Some progress has been made toward stabilizing Europe's sovereigns and banks, but "much remains to be done," he added.
The benchmark cash rate was left at 4.25%. Around 80% of economists had forecast a 0.25 percentage-point cut, the third since November.
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