The Reserve Bank has admitted it was helpless in the face of the US government default crisis because it could not predict or properly prepare for how the drama would play out.

While the US Congress this week approved a late deal to increase the US borrowing authority for a few months and end a partial government shutdown, Reserve Bank governor Glenn Stevens said failure to secure a resolution could have gone ''very badly''.

His comments came as fallout from the debt impasse and signs of renewed strength in the Chinese economy pushed the Australian dollar to a four-month high, touching as much as US96.47¢ in the Friday session. The rise coincided with Australia's sharemarket closing at its highest level since mid-2008. The benchmark S&P/ASX 200 Index closed up 38.4 points, or 0.7 per cent, at 5321.5.

Even so, the rise in the dollar has created a fresh headache for the Reserve Bank, which is under pressure to ease interest rates again, but is mindful of not stoking a resurgent property market.