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RBA's says $A keeps rates low

The Reserve Bank of Australia says the high value of the Australian dollar has helped push interest rates lower.

RBA governor Glenn Stevens told a parliamentary committee on Friday the cash rate, currently at three per cent, was lower than it would have been if the Australian dollar hadn't remained persistently high.

"If you were to ask me is the cash rate lower than it would have otherwise been, the answer is yes," Mr Stevens said in Canberra.

The Australian dollar is currently trading around 103 US cents.

Mr Stevens said the rise in the currency had helped offset the surge in investment in the mining industry, which would otherwise have led to higher interest rates.

"We've had a once in a century investment boom and we've come through that with interest rates now lower than average," he said.

"That sounds very unlikely, so how did that happen?

"Well the exchange rate is actually a big part of how that happened."

But Mr Stevens said the currency had deviated from its normal behaviour in recent months, remaining high despite a fall in demand for Australian government bonds.

"I actually think the flow into government securities has probably abated in the last six or eight months - that's what the data says," he said.

"But I think there are at least grounds to suggest the Australian dollar is behaving differently to some of its behaviour that we have been accustomed to, and that's relevant to the economy."