Economists forecast lesser chances of another overnight cash rate cut by the Reserve Bank of Australia (RBA) when it sits down on Tuesday for its regular monetary board policy rate meeting.

They cited the record-low inflation level despite the rise in electricity and gas prices caused by the carbon tax as reason why the RBA would not likely cut interest rates this month. Although the Gillard government has conceded that prices of goods and services will rise due to the $23 per tonne carbon price, it maintained that the average hike this financial year would just be 0.7 per cent.

The economists added that the rates would likely remain at current rate of 3.5 per cent to give the RBA time to assess the impact of two rate reductions in May and June by a total of 75 basis points.

"Given the favourable inflation outlook, the RBA is in the enviable position to have the tools to ease if required, although by how much and when depends on what lies ahead for the troubled European Union," The Australian quoted TD Securities analyst Annette Bleacher.

Meanwhile, reports said there is a growing clamor for an indepth review of the country's banking system with the aim of shattering the dominance of the big four and to have more competition. A report by Abacus warned that Australians are being overcharged by the big four due to lack of competition and pointed to the failure of government policies to address the issue.

"Without sensible review and action, this will lead to less choice and worse outcomes for Australian consumers in the future," The Australian quoted Abacus Chief Executive Louise Petschler.

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