'Beats to its own drum': rates on hold in surprise call

Another cash rate reduction to follow the May cut was expected to reflect subdued retail spending and under-control inflation.

Six board members were in favour of the hold, while three were against it based on a voting breakdown published for the first time under recent transparency reforms.

But for the RBA board, a desire to see more proof of sustainably-low inflation as well as strength in the labour market - especially in the absence of solid productivity growth - was enough to keep rates on hold.

The board acknowledged inflation risks had become "more balanced" but said it wanted to wait for "a little more information" confirming price growth was tracking consistently towards the middle of the two-three per cent target band.

Also hanging over the two-day meeting was the Trump administration's erratic trade policies, which threaten global growth and leave Australia vulnerable as an open, trade-exposed economy.

"It noted that monetary policy is well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia," the RBA's post-meeting statement read.

Oxford Economics Australia head of economic research and global trade Harry Murphy Cruise said the tariff uncertainty and good news on inflation warranted a cut in July.

"Yes, the domestic economy has pockets of strength and unemployment is low, but we'd rather see momentum build in the economy ahead of a potential storm than risk being caught flat-footed if conditions sour," he said.

"The RBA beats to its own drum, not the market's."

The central bank has already delivered two interest rate cuts this year, reflecting softening inflation and a shifting focus to the trajectory for economic activity.

Treasurer Jim Chalmers said interest rates had come down twice in five months but the job wasn't finished. 

"People are still under pressure and the global environment is so uncertain," he told reporters.