Australia may stay further interest rate cuts

Australia's central bank left its benchmark interest rate unchanged for the first time in seven months, saying the lowest borrowing costs in four decades and government spending are supporting the economy.

The nation's currency surged after Governor Glenn Stevens kept the overnight cash rate target at 3.25 percent in Sydney yesterday. Only four of 18 economists surveyed by Bloomberg forecast the decision. The rest tipped at least a quarter-point cut.

Australia's economy may skirt a global recession after Stevens slashed the benchmark by four percentage points between September and February and the government announced almost A$88 ($56 billion) of spending. A report today will probably show the economy grew 0.2 percent in the fourth quarter, according to a Bloomberg survey of economists yesterday.