The Australian dollar rose by more than a quarter of a US cent after the central bank cut the cash rate to a new record low of 2.5 per cent at its board meeting on Tuesday.

The Reserve Bank of Australia last cut the cash rate in May, by a quarter of a percentage point to 2.75 per cent.

At 1439 AEST, the currency was worth 89.59 US cents, up from 89.26 US cents shortly before the bank’s decision was announced.

The currency ended Monday’s local session at 89.09 US cents.