RBA Expected to Hold Steady as Inflation Concerns Linger

With the Reserve Bank's monetary policy board meeting on Tuesday, rate watchers are expecting a hold at 4.35 per cent for the cash rate.

Money markets and economists are near-unanimous in their agreement that rates will remain steady, but they'll be scrutinizing the new set of economic forecasts and Reserve Bank commentary for signs of future interest rate decisions.

Chris Read, Australian chief economist at Morgan Stanley, expects a hawkish tone from Governor Michele Bullock's statement and press conference. 'The governor is likely to emphasise the persistence of above-target inflation and the risk it poses to inflation expectations,' he said.

The quarterly trimmed mean for inflation is still 3.6 per cent, well above the two to three per cent target range.