Interest rates set to remain on hold this month but could still go down While markets don't expect rates to be cut this month, they are pricing in a cut in the months ahead. THE RESERVE Bank is tipped to disappoint homeowners hoping for some relief and leave rates steady at 3 per cent tomorrow. The improvement in global conditions, especially in China and the US, and signs of life in the domestic property market are expected to stay the central bank's hand. A rate cut at the central bank's first meeting of 2013 is seen by the markets as a less than one-in-four possibility. But further rate cuts later this year are still regarded as "highly likely." The market is pricing in a high possibility that rates could drop as low as 2.5 per cent by mid-year. The RBA slashed interest rates by 1.25 percentage points last year. A survey of 15 economists found that all but one expect the cash rate to stay steady in February. Even National Australia Bank chief economist Alan Oster, the only one tipping a rate cut this month, last week conceded it was a "line-ball call." The recent rise in prices for commodities, especially iron ore - usually a sign global conditions are on the rise - is seen as a major reason for the RBA's adoption of a wait-and-see approach. AMP Capital Investors chief economist Shane Oliver said the RBA would most likely wait for more data before it moved again. "The tentative signs of an uptick in housing indicators and some confidence measures are likely to encourage the RBA to wait a bit longer," he said. Impending unemployment figures will play a major role in deciding future rate moves. Some economists are forecasting that unemployment will rise to 6 per cent over the next 12 months, up from its current 5.4 per cent. Westpac is tipping the RBA will "stay on hold" this month, then cut by 0.25 points in March before staying on hold at 2.75 per cent for the rest of 2013. But Westpac chief economist Bill Evans said there were growing risks that global conditions would deteriorate in late 2013.