Australia's central bank has held interest rates at 4.5%, halting a series of rises that have seen rates rise by 1.5 points since October.
The Reserve Bank of Australia (RBA) said its cautious approach reflected the current uncertainty over the outlook for the global economy.
Previous rises in interest rates had been seen as a vote of confidence in the Australian economy.
But the recent turmoil in European markets has affected confidence.
Investors have raised fears that the recent debt crisis in some European economies could hurt the recovery in the global economy.
RBA governor Glenn Stevens said current interest rates were now in line with historical averages.
"Taking all the available information into account, the board views this setting of monetary policy as appropriate for the near term," he added.