Treasurer Scott Morrison is cagey about what the Reserve Bank will know about his budget when the central bank board meets on Tuesday.
Financial markets are betting on a 50/50 chance the board will lower the cash rate to a fresh record low of 1.75 per cent after last week's consumer price index showed the economy has sunk into deflation, a sign of soft economic demand.
The cash rate has been at all-time low of two per cent since May last year.
The rate decision would come just hours before Mr Morrison delivers his first budget.
The monthly board meeting and the budget are usually separated by a week, but Prime Minister Malcolm Turnbull brought forward the government's annual look at the books to provide scope for an election on July 2.
Mr Morrison has declined to say what RBA governor Glenn Stevens will know about the budget before the board's rate decision, saying it is "market sensitive", but points out Treasury secretary John Fraser is also a member of that board.
"You can be quite assured that Glenn Stevens will be in a very good position to be informed of the decision he has to make on that day," Mr Morrison said.
However, academics do not expect the central bank will upstage what will be a pre-election budget.
Australian National University's Timo Henckel says the latest consumer price numbers and a relatively high Australian dollar do not warrant a rate cut, with the jobless rate falling to 5.7 per cent and the world economy expanding, albeit only modestly.
Dr Henckel chairs the ANU's so-called "RBA shadow board" made up of academics, economists and former RBA board members.
"There remains a strong consensus for keeping the cash rate on hold," Dr Henckel said on Monday.
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