SYDNEY: Australia's central bank left its key interest rate unchanged for the third month at 3 percent yesterday, citing a stabilizing global situation and stronger-than-expected domestic economy.

The Reserve Bank of Australia has kept rates at the current level - their lowest in 49 years - since April but said in a statement there is room for further cuts this year if necessary.

Conditions in global financial markets are improving and action to strengthen balance sheets of key financial institutions is under way, RBA chief Glenn Stevens said in the statement. "There is tentative evidence that the US economy is approaching a turning point, but conditions in Europe are still weakening."