The Reserve Bank has cut the cash rate to a record low of 1.75 per cent to help push inflation into its target range.

RBA governor Glenn Stevens said the 0.2 per cent drop in March quarter consumer prices from an already low level was a key concern for the central bank.

He said, when combined with subdued growth in labour costs and very low inflation globally, the outlook for domestic inflation was lower than previously forecast.

“The board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting,” Mr Stevens said.

The RBA’s target band for inflation is two to three per cent.