Despite a significant level of anticipation the Reserve Bank would cut interest rates this month, it has kept them on hold for the 30th consecutive meeting.

Key points: The Reserve Bank's cash rate target remains on hold at a record low 1.5 per cent for the 30th meeting

The Reserve Bank's cash rate target remains on hold at a record low 1.5 per cent for the 30th meeting Markets are pricing in a greater-than-70 per cent chance of rates falling by the August meeting

Markets are pricing in a greater-than-70 per cent chance of rates falling by the August meeting The RBA is looking for further falls in unemployment or underemployment to boost inflation, otherwise it may cut rates

The record-low cash rate of 1.5 per cent has been at that level since the last move in August 2016, although money market traders do not expect it to stay there much longer.

The market is now seeing a 37 per cent chance of rates falling in June, a better than even chance of a cut by July, and a greater-than-70 per cent chance of rates falling by the August meeting.

The bulk of analysts expect two rate cuts from the RBA, with both probably occurring before the end of this year.

Markets had priced in about a 40 per cent chance of the bank moving rates at today's board meeting — odds that had peaked closer to 70 per cent in recent weeks.

Betting on a rate cut has been boosted by weakness in two key datasets released over the past two months — GDP and inflation.

Australia's economy grew just 0.2 per cent in the last quarter of last year, an annual growth rate of 2.3 per cent.

Bureau of Statistics figures show consumer prices remained unchanged over the first three months of this year, for an annual inflation rate of 1.4 per cent when the most volatile price changes were removed.

That inflation rate is well below both the Reserve Bank's forecasts and its 2-3 per cent target range, and caused a massive surge in betting on a May rate cut.

However, in his post-meeting statement, Reserve Bank governor Philip Lowe seemed to play down the weak inflation reading, choosing to use a measure of underlying inflation (the trimmed mean at 1.6 per cent) that was much closer to the target than another figure (the weighted median at 1.2 per cent). The RBA historically has looked at an average of the two.

"Lower housing-related costs and a range of policy decisions affecting administered prices both contributed to this outcome," he argued.

"Looking forward, inflation is expected to pick up, but to do so only gradually."

The bank recently stated it was looking to a rise in unemployment as well as low inflation to trigger a move down from what are already record-low interest rates.

The most recent figures show trend unemployment holding steady at 5 per cent, although fresh jobs data for April will be released next week.

RBA looks set to cut rates if unemployment doesn't fall

The Reserve Bank appears to have adjusted its threshold for a rate cut, noting that further declines in unemployment would likely be needed to get inflation back towards its target.

"[The RBA board] recognised that there was still spare capacity in the economy and that a further improvement in the labour market was likely to be needed for inflation to be consistent with the target," RBA governor Philip Lowe noted in his post-meeting statement.

"Given this assessment, the board will be paying close attention to developments in the labour market at its upcoming meetings."

In the same statement, Dr Lowe acknowledged that the Reserve Bank's current forecast is for no rapid decline in unemployment.

"The unemployment rate has been broadly steady at around 5 per cent over this time and is expected to remain around this level over the next year or so, before declining a little to 4.75 per cent in 2021," he wrote.

Callam Pickering, the Asia-Pacific economist with global jobs website Indeed, said "there is a sense of inevitability surrounding the bank's next move", which will be a cut.

"The precise timing of these cuts will depend on the labour market," he wrote in response to the RBA's decision.

"That they want to see 'further improvement' in the labour market to meet their inflation objectives is an acknowledgement that a 5 per cent unemployment rate is no longer good enough.

"A softish labour market result in May could very well lead to a cut next month. A stronger than expected result might delay cuts a little longer."

Get your own rate cuts

However, Sally Tindall from RateCity said many borrowers do not need to wait for the RBA to get a lower home loan rate.

"The downturn in the market is putting pressure on banks' bottom lines. What they need is more business on their books," she said.

"The best way for borrowers to get a rate cut is to turn themselves from an existing customer into a new one."

Ms Tindall said new customers can get variable rates as low as 3.44 per cent with some of the smaller lenders, while many banks, large and small, are offering discounted fixed-rate offers.