The Reserve Bank of Australia (RBA) board announced its decision to leave interest rates on hold yesterday. At its meeting on April 3 the board kept the cash rate target unchanged at 6.25 per cent.
"It sort of makes sense to wait with March CPI number due out soon and a federal budget on the horizon," FIIG securities managing director Jim Stening said.
According to Stening, while the futures market has already priced in a potential May this is just a punt on the upcoming inflation figures.
"The March CPI figures are likely to fall within the RBA's medium term guidelines, so the currency is the key. A sustained appreciation of the Australian dollar will have a positive effect on prices, so by holding rates this has now given the RBA some time to consider a move," Stening said.
Many analysts had predicted an increase from the current rate with a view to slowing the hotting up economy, push inflation higher.
A 25 basis point hike in May will see rates at there highest level in more than a decade.
There have been four interest rate rises in the last two years.
