The decision will surprise few, with market expectations prior to the decision putting the probability of an April Fools Day cut below 10%.
RBA Governor Michele Bullock said the RBA will need to be more confident about the inflation outlook before further loosening of monetary policy, despite the recent panic in share markets both in Australia and abroad.
"The continued decline in underlying inflation is welcome, but there are nevertheless risks on both sides and the Board is cautious about the outlook," the accompanying statement from the Monetary Policy Board read.
It was also suggested prior to the decision that a surprise rate cut could be seen as a political move that would likely give the incumbent Labor Government a boost before the election on 3 May.
May cut incoming?
Attention now turns to the May decision which could be more live, where the board will benefit from a data dump on the latest inflation numbers, which are scheduled for release on 30 April.
The language in the accompanying statement softened slightly, removing references to "upside risks" to instead say "risks on both sides".
This might be interpreted as making this a dovish hold that leaves the door open for a May cut, although as usual the Board says it is still cautious about the economic outlook.
It's still possible that inflation might start to climb back up again - the unemployment rate remains at 4.1% and below RBA expectations while domestic demand is also strong.
However, the spectre of a possible US led recession continues to loom over the economy, with concerns about tariffs prompting markets to tumble in recent weeks.
On 31 March the ASX dropped more than 100 points, marking the worst March quarter since the pandemic obliterated markets in 2020.
The Board highlighted this in the monetary policy statement, acknowledging the US tariffs are "having an impact on confidence globally."
"This would likely be amplified if the scope of tariffs widens, or other countries take retaliatory measures."
Picture from the RBA
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