SYDNEY--Australia's central bank left interest rates unchanged at a record low 2.5% Tuesday, once again citing the high Australian dollar as a headwind for growth and pointing to a continuing period of steady rates.

There was no significant shift in the language of the central bank from prior months, although it did acknowledge that the Australian dollar had fallen.

"On present indications, the most prudent course is likely to be a period of stability in interest rates," Reserve Bank of Australia Gov. Glen Stevens said in an accompanying statement.

The Australian dollar fell 7% in September, fueling optimism among exporters, but the central bank said the currency had further to fall before it could begin to spur the economy.

"The exchange rate has traded at lower levels recently, in large part reflecting the strengthening U.S. dollar," Mr. Stevens said.

"But the Australian dollar remains above most estimates of its fundamental value, particularly given the further declines in key commodity prices in recent months."

He added: "It is offering less assistance than would normally be expected in achieving balanced growth in the economy."

The central bank has held interest rates at a record low for well over a year as it seeks to cushion the economy from the end of a mining-investment boom and support recovery in other parts of the economy.

So far, the policy has fueled a recovery in housing construction, but also produced a strong surge in house prices that has worried the central bank--forcing it to mull new lending restrictions on investor loans.

Mr. Stevens noted that credit growth was moderate overall, but added that there had been a further rise in mortgage lending to investors over recent months, while house prices had continued to rise.

Forward-looking indicators of the job market had shown improvement, but Mr. Stevens said it would be some time before unemployment fell from a current decade high of 6.2%.

Write to James Glynn at james.glynn@wsj.com

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