The Australian central bank on Tuesday has announced it would keep its main cash rate steady at 4.75 percent as expected. But analysts predict the decision might temporary as the government might raise interest rates later in the year to keep inflation in the light of massive trade and mining boom.

The Reserve Bank of Australia (RBA) made the announcement following its monthly policy meeting as it try to arrest inflation in the midst of summer rain which have been affecting prices on food as well as the conflict in the Middle East which is driving prices of oil up.

In the first quarter of the year, the cost of living soared as inflation spiked to 1.6 percent for an annual headline inflation rate of 3.3 per cent.

Cyclone Yasi which hit Queensland in January and the ongoing crisis in Libya are being blamed for the rise in inflation which posted the highest in five years during March.