A top Reserve Bank (RBA) official has signalled that mortgage rates could stay at their current relatively low levels for some time.
The comments come a day after the RBA , the same level as at the peak of the financial crisis.
During a speech in Sydney, RBA deputy governor Philip Lowe said interest rates were now lower than they might otherwise be to offset the persistently strong dollar.
"It should not really come as a surprise that countries that are in relatively good shape and have not seen large-scale expansion of the central bank balance sheet are experiencing stronger currencies than those that are in relatively poor shape," he said.
"This is one of the mechanisms through which the weak conditions in most of the advanced economies are transmitted to the rest of the world.
"And in response to this, interest rates are lower than they otherwise would be to offset some of the effects of an uncomfortably high exchange rate." Dr Lowe also contradicted the shadow treasurer Joe Hockey's comments that the cash rate is at emergency levels.
"The word emergency became used a few years ago because the global economy was in an emergency, financial institutions were on the brink," he said.
"That's not the world we're in now, I would not describe these as emergency settings." He said interest rates will stay lower as Australians adjust to the end of the boom in credit and the terms of trade of the past two decades.
"It is possible that normal lending rates will be somewhat lower for a period owing to the combination of global factors and the legacy of the credit boom," he said.
"Whether or not this turns out to be the case depends upon a whole range of factors, including how cost and price pressures in the economy evolve." But he added monetary policy still looked like it was working.
"There are lags and different parts of the economy respond differently, but lower interest rates are still effective in providing a boost to the overall economy." Yesterday, RBA governor Glenn Stevens highlighted the strength of the local currency as a factor in the central bank's thinking.