RBA keeps the cash rate on hold at 4.35 per cent

The decision marks the fifth consecutive hold and was widely expected by the market.

The RBA board once again said it would not rule "anything in or out" as it continues its battle against inflation.

After the meeting, RBA governor Michele Bullock said the board considered the case for a rate rise but decided its current strategy of staying the course was "the right way to go".

She said the board did not consider the case for a rate cut in June.

The RBA board said inflation was proving persistent.

"Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance," the board said in its statement.

"But the pace of decline has slowed in the most recent data, with inflation still some way above the midpoint of the 2-3 per cent target range."

Treasurer Jim Chalmers said another hold gave households "a little bit more certainty in tough times".

"Inflation is still higher than we'd like and it's lingering around the world, but it is moderating and our policies are helping," he said.

The RBA's decision comes after the annual rate of inflation increased for the second consecutive month.

The monthly consumer price index indicator grew 3.6 per cent in the 12 months to April, up from 3.5 per cent in March and 3.4 per cent in February, the Australian Bureau of Statistics reported.

The central forecast, published in May, was for inflation to return to the 2-3 per cent target range in the second half of 2025.

Returning inflation to target remained the RBA board's top priority.

"Inflation is easing but has been doing so more slowly than previously expected and it remains high," the board said.

"The board expects that it will be some time yet before inflation is sustainably in the target range."

The board said recent inflation data reinforced the need to "remain vigilant to upside risks to inflation".

"The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out," it said.

The 38 economists and experts surveyed by comparison website Finder had forecast a hold in June.

Similarly, Reuters polled 43 economists, who all predicted a pause.

Matthew Greenwood-Nimmo, associate professor of economics at the University of Melbourne, expected rates to stay on hold for some time to come.

"Although inflation is still stubbornly high, the RBA is likely to hold the cash rate constant in the near term," he said.

"There are signs of weakness in the economy and the full impact of past rate hikes is yet to be fully felt."

Many economists are still forecasting a cash rate cut in 2024, either in November or December, according to Finder's June survey.

Others say the RBA will wait until February or March before they make any downwards moves.

Bendigo Bank chief economist David Robertson warned households not to budget for a rate cut in 2024.

"For the RBA to cut rates, they will need to be convinced high inflation is fully contained; and the latest monthly CPI figures unfortunately don't help that perception," he said.

Mortgage Choice CEO Anthony Waldron said the June release of the consumer price index would be key to the RBA's future moves.

"While borrowers and hopeful buyers are eager to see rate cuts, the Reserve Bank governor has made it clear that tackling sticky inflation remains a priority," he said.

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Speculation about how long the RBA will keep rates on hold has led mortgage holders to stick with variable rates for now, Mr Waldron said.

Of the home loan submissions made through Mortgage Choice so far in June, 98 per cent were for variable rates.

More to come.