Minutes of the Reserve Bank of Australia's (RBA) March meeting released on Tuesday showed policymakers were ready and willing to ease monetary conditions further to support the Australian economy.
Members also agreed it was important to "maintain contact" given the speed of events, suggesting they would consider moving before the next scheduled policy meeting on April 7.
Speculators latched on to a pledge by the RBA this week that it will announce a new package of stimulus measures on Thursday, betting it would include an out-of-cycle cut to the cash rate to 0.25% together with unconventional policy measures to loosen financial conditions.
Analysts at ANZ Banking Group expect these steps to help lessen stress in funding markets.
"But it will not be a straightforward path and is predicated on what additional actions the RBA takes and a reduction in USD funding stress," rates strategist Jack Chambers wrote in a note.
Chambers added that combined with the U.S. Federal Reserve's injection of hundreds of billions of dollars of liquidity, there should be "some normalisation" to market conditions.
"Although, in this market it is hard to be definitive about anything."
The RBA's special meeting comes amid the mounting economic toll from the coronavirus, with many analysts predicting the Australia's A$2 trillion economy will slip into recession in the first half of the year after 29 years of uninterrupted growth.
Central banks around the world have launched a coordinated round of easing, led by a 100-basis-point rate cut from the Fed on Sunday, but the measures haven't staunched the haemorrhaging in markets.
Earlier, Australia's national carrier Qantas said it would cut its international capacity by around 90% until at least the end of May as travel demand plunges because of new restrictions on arrivals related to the coronavirus.
Data on spending by ANZ cardholders and on ANZ's point-of-sale systems on Tuesday showed the deepest cut was in dining out with travel-related and entertainment expenditure also falling sharply.
Spending in eating out contracted by 1% for the week-ended March 4 on an annual basis from a gain of 6% in the week-ended Feb.26. Entertainment was down 20% year-on-year while travel was down around 7%.
Australian leaders are now considering even tighter restrictions on movement of the country's residents, including a ban on social gatherings of more than 100 people.
The RBA minutes showed a near-term containment of the virus was considered "very unlikely".
Those fears have sapped confidence in markets where the destruction of wealth has prompted businesses to reconsider investment plans, threatening jobs and spending.
"It's now fair to call this the single biggest shock that global aviation has ever experienced," Qantas Chief Executive Alan Joyce said in a memo to the airline's 30,000 staff on Tuesday.
By Swati Pandey and Wayne Cole