HOBART, July 3 Australia's economic rebalancing away from the mining boom is still in its early stages, a top central banker said on Thursday, while warning investors they were underestimating the risk of sharp fall in the local dollar.
In a wide-ranging speech, Reserve Bank of Australia (RBA) Governor Glenn Stevens said there had not been any thought of raising interest rates, and implied markets were right to price in a long period of steady policy.
Stevens played down the impact of the Liberal-National government's unpopular budget, saying it was unlikely to have a material affect on the economy for the next year or so.
Stevens also welcomed the recent slowdown in the growth of house prices and hoped it would persist for the next year or so.
There had been encouraging signs that record-low interest rates were working to support consumer demand, home building, employment and non-mining investment.
"But these signs remain early ones," said Stevens. "There is quite some way to go yet before the episode is completed."
(Reporting by Wayne Cole)