The board will come to a decision on Tuesday after two days discussing the overall state of the economy and progress on inflation, which at 4.1 per cent remains above the two to three per cent target range.

A Reuters poll of economists found all 40 expected the cash rate to stay on hold at 4.35 per cent in March for the third meeting in a row.

With the call itself uncontroversial, the tone struck by the board in the post meeting statement and governor Michele Bullock in the media conference afterwards will be of greater interest and trawled through for insights into the bank’s next move.

The board kept its options open to hike further at the previous meeting but economists broadly agree the next move will be down, although there is no clear consensus on when easing will start.

The big four banks are leaning towards cuts in the second half of 2024, with Commonwealth Bank and Westpac pencilling in a September start while NAB and ANZ forecast easing to begin in November.

ANZ head of Australian economics Adam Boyton said there was a risk cuts would start sooner than its base case as the latest data suggests inflation is cooling rapidly.

“That said, we think the Reserve Bank will be cautious in declaring victory against inflation and may prefer to wait until the annual change in inflation has come back within the band, which we expect in the September quarter 2024 for headline inflation,” he said.

Boyton said the RBA may wait to watch the consumer reaction to income tax cuts that kick in on July 1 as well as the influence of any additional spending in the May federal budget.

–  AAP