The Australian dollar has plunged after the consumer price index showed zero growth in the March quarter, increasing the prospect of a Reserve Bank interest rate cut.

Figures from the Australian Bureau of Statistics show annual inflation for the 12 months to March 31 slowing to 1.3 per cent after quarterly inflation fell short of the 0.2 per cent expected by the market.

Already falling, the Australian dollar fell another 0.5 per cent to 70.52 US cents on the data’s release.