Summary Box: Australia raises interest rate

SPRINGING HIGHER: Australia's central bank jacked up its key interest rate in a move to ward off higher inflation as the nation's economy booms.

SURPRISE MOVE: The decision was a surprise. The Reserve Bank said it expected inflation to go higher because of the country's mining boom — which is being driven by rising Asian powers China and India. The bank said Australia's economy is facing a "large expansionary shock" because of the high prices its mineral exports are fetching overseas.

WEATHERING THE STORM: Australia was one of the few developed nations to avoid a recession following the 2008 financial crisis. Its economy was insulated by government stimulus spending, less risk-taking by banks, and demand from Asia for commodities.