Central bank governor Glenn Stevens has cut rates from 7.25% last August

The Australian central bank has cut interest rates to a 49-year low.

The Reserve Bank of Australia cut its benchmark rate by a quarter percentage point to 3%. Most economists had been predicting no change to rates.

"The contraction in the global economy continued during the first few months of this year," the central bank said.

Australia's government announced a 42bn Australian dollar ($26.5bn; £19bn) stimulus plan last month as the country faces its first recession since 1991.

Separately, the Bank of Japan (BOJ) kept its rates at 0.1%, as expected.

But the Japanese central bank expanded the collateral it will accept in return for loans to commercial banks, now accepting loans on deeds to municipal governments.

The BOJ already buys corporate bonds and short-term debt to help boost the balance sheet of its banks.