The official cash rate will stay on hold at 4.1 per cent, the Reserve Bank board decided at its April meeting.
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The decision will come as no surprise to the majority of experts and economists, who expected the Reserve Bank would take a cautious approach to further rate cuts in 2025, after February's long-awaited rate decrease.
In a statement, the Reserve Bank board said underlying inflation continued to ease in line with forecasts but the outlook was still uncertain.
"Nevertheless, the board needs to be confident that this progress will continue so that inflation returns to the midpoint of the target band on a sustainable basis," the statement said.
"It is therefore cautious about the outlook."
Reserve Bank governor Michele Bullock said a cash rate cut was not explicitly discussed by the board on Tuesday.
She said the board came to a consensus that holding the cash rate was the right thing to do, given the domestic economy had evolved broadly as expected.
Ms Bullock said there had been good progress on inflation but the board was cautious not to "get ahead of ourselves".
"We've come a long way and it hasn't been easy," she said.
No election campaign rate cut
The cash rate hold was announced as the federal election campaign gets under way, which is set to put the cost of living at the heart of the national debate.
The April meeting was the only chance for a cash rate cut to fall within the election campaign, with the Reserve Bank board set to meet again on May 20, two weeks after polling day.
Treasurer Jim Chalmers denied a cash rate pause was detrimental to Labor's election campaign, saying he does not see the announcement in political terms.
However he used the opportunity to remind voters inflation was above 6 per cent and rising when Labor came to government.
The consumer price index peaked at 7.8 per cent in December 2022 and has since fallen to 2.4 per cent.
"It's a fraction of what we inherited," Dr Chalmers said on Tuesday.
Dr Chalmers said despite the April cash rate hold, the market was pricing in a rate cut for May.
"Rates have already started coming down this year and that's a good thing," he said.
It was the first meeting for the central bank's new-look monetary policy board, with new faces including Australian National University professor Renee Fry-McKibbin.
At its February meeting, the Reserve Bank board said it remained cautious on prospects for further policy easing, saying there were "notable uncertainties" about the economic and inflation outlook.
Ms Bullock said in February the decision to "remove a bit of restrictiveness" by cutting the cash rate was not an easy decision.
"We can be happy with the progress made but we have to be careful not to get ahead of ourselves," she said.
Of the 34 experts and economists surveyed by comparison website Finder, 32 predicted a cash rate hold in April.
Rate cut 'not urgent'
Geoffrey Kingston from the Macquarie University Business School had predicted a rate hold in April, but noted recent inflation and employment data was a promising sign for future rate relief.
He expected there would be further rate cuts soon, but not just yet.
"It's not urgent and the bank will want to keep a low profile during the election campaign," he said.
"By the same token, February's significant fall in full-time employment heralds downward pressure on inflation. Likewise, February's inflation print was lower than expected."
The monthly consumer price index fell 10 basis points to 2.4 per cent in the year to February. Underlying inflation, the Reserve Bank's preferred metric which excludes volatile price changes, also fell 10 basis points to 2.7 per cent.
The four major banks had also tipped no rate cut in April, but were divided on when households can expect further interest rate relief.
