Inflation slumps below RBA target in March

Consumer prices were down 0.2 per cent in March, after falling 0.2 per cent in February, the Melbourne Institute inflation gauge shows.

Cheaper fruit and vegetables have pushed the annual rate of inflation below the RBA's target range. (AAP)

Cheaper fruit and vegetables have pushed the annual rate of inflation below the Reserve Bank's target range.

Consumer prices fell 0.2 per cent in March, after dropping 0.2 per cent in February, the Melbourne Institute's monthly inflation gauge shows.

In the 12 months to March, the inflation gauge rose 1.7 per cent. That's below the central bank's target band of two to three per cent.

Tobacco prices rose 4.7 per cent while holiday travel and accommodation prices were up 1.5 per cent in March.

But those rises were offset by fruit and vegetable prices declining 3.4 per cent and audio, visual and computing equipment prices falling 2.2 per cent.

Excluding volatile items like petrol, and fruit and vegetables, core inflation was unchanged between February and March, and 2.3 per cent above its level of a year ago.