BENGALURU, April 3 (Reuters) - The Reserve Bank of Australia will pause policy tightening on Tuesday according to an updated poll of analysts, although a strong minority still forecast a hike.
The Reuters poll median forecast was revised on Monday to anticipate a pause by the RBA at its April meeting, having previously predicted a hike.
That shift came after some regular contributors, who were not included in a Friday survey, provided their views over the weekend.
Australian inflation slowed to an eight-month low in February, although it was still well above the central bank's target of 2%-3%.
A majority of economists, 21 of 37, now forecast the cash rate to remain unchanged at 3.60% on April 4. Interest rate futures are not pricing in any further hikes. 0#RBAWATCH
The remaining 16 still forecast a hike of 25 basis points to 3.85%.
However, major local banks were divided on the RBA's upcoming decision on Tuesday. While ANZ and NAB predicted a rate hike, CBA and Westpac anticipated a pause but expected another increase next month.
"TD now forecasts the RBA target cash rate to peak at 3.60%. Our prior call was for a 4.35% terminal cash rate. Bank communications since the 7th March Statement have clearly indicated the RBA's strong intention to consider pausing. The monthly CPI prints now provide that scope," noted Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities.
"If we are wrong, we would expect the RBA to hike 25bps in April and then move to the sidelines rather than pause in April and hike in May sending mixed signals to the market. There is also the possibility the RBA may hike later in the year after a pause," Newnaha said.
(For other stories from the Reuters global long-term economic outlook polls package:)
