In a statement Reserve Bank of Australia governor Philip Lowe said: "At its meeting today, the Board decided to lower the cash rate by 25 basis points to 0.50 per cent.

"The Board took this decision to support the economy as it responds to the global coronavirus outbreak."

The statement went on to say that the epidemic was having a "significant" effect on the country's economy and it was difficult to predict how large and long-lasting the impact will be.

The move comes as finance ministers of the Group of 7 advanced economies and their central bank governors will hold a conference call later on Tuesday to discuss measures to deal with the virus and its mounting economic toll. 

Two people walk past the Reserve Bank of Australia in Sydney.