SYDNEY, July 4 Reuters Australia39;s central bank on Tuesday held interest rates steady saying it wanted more time to assess the impact of past hikes, but reiterated its warning that further tightening might be needed to bring inflation to heel.

Wrapping up its July policy meeting, the Reserve Bank of Australia RBA kept its cash rate at an 11year high of 4.10, having lifted rates by 400 basis points since May last year, in its most aggressive tightening cycle in modern history to tame inflation.

Markets had been leaning towards a pause, but economists were split on the outcome, with 16 out of 31 polled by Reuters expecting a hike and the rest forecasting the bank to stand pat. .

The Australian dollar dipped 0.4 to 0.6647. The market has now shifted to imply around a 5050 chance of a hike to 4.35 in August, while scaling back the risk of a further move to 4.6.

In Tuesday39;s policy statement, RBA Governor Philip Lowe said that higher interest rates are working to establish a more sustainable balance between supply and demand in the economy.

In light of this and the uncertainty surrounding the economic outlook, the Board decided to hold interest rates steady this month.

The RBA chief pointed to uncertainties about the outlook for household consumption and regarding the global economy.

However, Lowe repeated previous warnings that some further tightening of monetary policy might be required as inflation is still too high and will remain so for some time yet….