The Reserve Bank of Australia has cut official interest rates by a quarter of a percentage point to a fresh record low of 0.5 per cent as it attempts to protect the Australian economy from the financial fallout of the coronavirus outbreak.

Westpac was the first of the major banks to react to the RBA's first reduction in the cash rate since October, announcing it would pass on the cut in full to borrowers. Commonwealth Bank, ANZ and National Australia Bank all followed suit.

Following its first meeting since turmoil on global equity and bond markets wiped trillions of dollars from company values, RBA governor Philip Lowe said the coronavirus had clouded the near-term outlook for both the global and Australian economies.

"The coronavirus outbreak overseas is having a significant effect on the Australian economy at present, particularly in the education and travel sectors," he said. "The uncertainty that it is creating is also likely to affect domestic spending. As a result, GDP growth in the March quarter is likely to be noticeably weaker than earlier expected.