The move boosted confidence in local financial stocks, with National Australia Bank closing 7.3 per cent higher.
That helped the ASX 200 rise 1.2 per cent to 4,982.
The All Ordinaries index added 51 points to 5,008.
BHP shares closed flat on the share market at $37.87.
Fortescue stocks were down 0.8 per cent to $6.46.
About 5.30pm AEST, gold was worth $US888.20 an ounce.
Oil had dropped to $US107.85 a barrel.
The Australian dollar was worth 83.74 US cents, 45.13 UK pence, 88.96 Japanese yen and 57.06 euro cents.
The Reserve Bank, meanwhile, has joined the latest effort to address the global financial crisis.
It has agreed with the US Federal Reserve to join the central banks of Sweden, Norway and Denmark in pouring $US30 billion into the global system.
Of that the RBA is contributing $US10 billion to create a swap facility to try to address the problems institutions around the world are having in refinancing their US dollar loans.
The facility means local authorised institutions will be able to swap their Australian dollar assets for US dollars and will then be able to pay off their US dollar loans.
In other share market news, BHP Billiton has lost its High Court appeal to prevent Fortescue Metals Group accessing one of its rail lines in Western Australia.
The final decision is still in the hands of the Australian Competition Tribunal, which is expected to hear the matter early next year.
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