Aussie share market hits four-year low despite emergency rate cut due to coronavirus pandemic

Australia's share market has endured a rollercoaster day to finish at a low not seen since 2016.

The benchmark S&P/ASX200 finished down 170.3 points, or 3.44 per cent, to 4,782.9, shrugging off an emergency rate cut by the Reserve Bank to a historic low of 0.25 per cent.

The Australian dollar plunged on the RBA's emergency measures, buying just 55.76 US cents, down from 59.98 US cents on Wednesday.

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Reserve Bank governor Philip Lowe says while the coronavirus is first and foremost a public health issue, it is having a "very major impact" on the economy and financial system.

"As the virus has spread, countries have restricted the movement of people across borders and have implemented social distancing measures, including restricting movements within countries and within cities," he says in a statement issued on Thursday afternoon.

"The result has been major disruptions to economic activity across the world.

"This is likely to remain the case for some time yet as efforts continue to contain the virus."

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At an emergency meeting on Thursday, the central bank agreed to slash the cash rate to 0.25 per cent, the lowest in Australia's history.

It will also start buying government bonds, a move that would flood Australia's financial system with extra cash to keep the economy functioning smoothly during the crisis.

As well, it will set up a three-year $90 billion fund for banks to help small- and medium-sized businesses keep their heads above water, and ease some regulatory pressure on the banks to allow them to keep the money flowing.

Banks will be able to start accessing the fund by April 16.

Dr Lowe said these measures complemented the government's economic stimulus package, which so far is $17.6 billion but is set to be expanded in coming days.

"Together, these measures will support jobs, incomes and businesses through this difficult period and they will also assist the Australian economy in the recovery," the banker said.

"Australia's financial system is resilient and well placed to deal with the effects of the coronavirus."

With AAP