Turmoil on financial markets could dent global economic growth, but Australia has a good chance of emerging unscathed, the head of the Reserve Bank says.

Global economic growth forecasts have been lowered in recent months due to volatility on share markets and signs of slowing growth in China, the world's second largest economy, RBA governor Glenn Stevens told the House of Representatives economics committee.

The US Federal Reserve has also decided to hold its key interest rate at zero, due to worries that China's slowdown will hit the US economy.

"Whether that financial volatility itself will serve further to dampen global growth prospects remains to be seen," Mr Stevens said.

"Sometimes such events portend a wider set of economic events, but just as often, they don't."

Importantly, the Australian economy is still growing, although slower than the RBA would like at its current annual rate of 2.0 per cent, he said.

It escaped the global financial crisis without a major downturn and has so far passed through the phases of the mining boom without a spike in inflation or a sudden slump, Mr Stevens said.

"There is still a pretty good chance that we will come out of this episode fairly well, and much better than we came out of previous episodes of this type," he said.

The US will be a key factor for the global economy, and it continues to show signs of improvement, he said.

That's despite the overnight rates decision by the Federal Reserve, which had a negative impact on Wall Street and the US dollar.

Mr Stevens said the timing of a rate hike in the US is not the most significant issue.

"Some fretting about the first increase in US interest rates for nine years is to be expected, no matter how well telegraphed it has been," he said.

"The more important factor, though, will be the pace of subsequent increases."