Why RBA boss is in the spotlight

The governor will front up to the National Press Club in Sydney on Wednesday and is expected to provide further insight about the outlook for the official cash rate.

After 10 consecutive rate hikes, the central bank left the cash rate on hold at 3.6 per cent despite concerns about persistently high inflation.

Since May 2022, the RBA has aggressively lifted rates from a record low 0.1 per cent in a bid to curb skyrocketing inflation.

Inflation rose to 6.8 per cent in the 12 months to February, falling from 7.4 per cent annual growth in January and down from the peak of 8.4 per cent in December

But it is still well above the bank’s target range of 2 to 3 per cent.

Dr Lowe said the pause would give the bank time to assess the impact of the rate rises.

Concerns over the collapse of America’s Silicon Valley Bank and the takeover of Switzerland’s Credit Suisse were also cited.

But he left the door open to slugging mortgage holders with a further rate rise in the months ahead.

“The board expects that some further tightening of monetary policy may well be needed to ensure that inflation returns to target,” he said in a statement on Tuesday.

Economists at the big four banks all think there is at least one more rate rise to come.

Quarterly inflation data, set to be released later this month, will be “pivotal” to whether the central bank hands down another increase, BIS Oxford Economics head of macroeconomic forecasting Sean Langcake said.

“Inflation remains uncomfortably high, and the very tight labour and rental markets have the potential to provide an upside surprise on inflation,” he said.