As widely anticipated by economists, the RBA left the official cash rate at a record low 0.1 per cent following its monthly board meeting on Tuesday.

Dr Lowe reiterated the cash rate will not be increased until inflation is sustainably within the two to three per cent target range, saying such conditions will not be met before 2024.

"This contrasts with several other central banks that seem to be bringing rate hikes forward and arguably reflects more confidence on the RBA's part that the current spike in global inflationary pressure is transient," AMP Capital chief economist Shane Oliver said.

However, Dr Lowe remained fairly upbeat about the economic outlook beyond the current spate of lockdowns in the nation's two largest states - NSW and Victoria.

"The Delta outbreak has interrupted the recovery of the Australian economy and GDP is expected to have declined materially in the September quarter," Dr Lowe said.

"This setback to the economic expansion in Australia is expected to be only temporary. As vaccination rates increase further and restrictions are eased, the economy is expected to bounce back."

However, he said there is uncertainty about the timing and pace of the bounce-back, and it is likely to be slower than that of earlier in the year.

"In our central scenario, the economy will be growing again in the December quarter and is expected to be back around its pre-Delta path in the second half of next year," Dr Lowe said.

Among its policy toolkit, the RBA will continue to target the April 2024 government bond yield at 0.1 per cent, while buying bonds at a rate of $4 billion a week until at least February 2022 with the aim of keeping market interest rates and borrowing costs low.

Dr Lowe said the package of policies is providing substantial and ongoing support to the Australian economy.

"Borrowing rates are at record lows, sovereign bond yields are at very low levels and the exchange rate has depreciated over recent months," he said.

"The fiscal responses by the Australian government and the state and territory governments have also been providing welcome assistance in supporting household and business balance sheets."

Dr Lowe also gave little away about what the banking regulator, the Australian Prudential Regulation Authority, may introduce to take the heat out of the housing market.

He said housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak.

But housing credit growth has picked up due to stronger demand for credit by both owner-occupiers and investors.

"The Council of Financial Regulators has been discussing the medium-term risks to macroeconomic stability of rapid credit growth at a time of historically low interest rates," Dr Lowe said.

"In this environment, it is important that lending standards are maintained and that loan serviceability buffers are appropriate."

Australian Associated Press