Reserve may stay its hand amid glimmers of hope

There once was a convention that monetary policy action ahead of a budget might indicate lack of confidence in what the budget contains. Perhaps this has been junked, along with the convention that the central bank does not "vote" by changing interest rates during an election campaign.

There are two reasons for the Reserve to stay its hand today. There are those green shoots of recovery, added to which it would be prudent to leave room for further rate cuts if the economic outlook again deteriorates.

And there is the (possibly outmoded) convention of not indicating possible displeasure at the budget itself.

On the other hand, as they say, jobs are falling much faster than the Reserve Bank and Treasury predicted, which provides a strong contrary argument.

Whatever the decision, the governor's statement will make interesting reading, and his actions will speak far louder than his words.