Three central banks across Asia Pacific delivered surprise interest-rate decisions on Wednesday as policy makers take aggressive action to counter a worsening global economy.

New Zealand and India led with bigger-than-expected interest rate cuts, while Thailand’s 25-point reduction was a surprise to all but two in a Bloomberg survey of economists.

Policy makers are taking bolder steps to bolster their economies as escalating U.S.-China trade tensions threaten to worsen global growth and currency battles roil financial markets. The Federal Reserve’s rate cut last week paved the way for more easing in the region, and markets are pricing in the chance of another cut in September after President Donald Trump threatened additional tariffs against China.

“Demand is easing globally, and inflation pressures look set to remain highly restrained,” said Chang Wei Liang, a macro strategist of DBS Group Holdings Ltd. in Singapore. “The dovish bias could remain somewhat entrenched, until there are signs of green shoots in Europe/China, and some meaningful reduction in trade anxiety.”

What Bloomberg Economists Say

Thailand: With the U.S.-China trade war spilling into currencies, more Bank of Thailand rate cuts may be forthcoming, especially as Bloomberg Economics expects the People’s Bank of China to cut rates later this year -- Tamara Mast Henderson, Asean economist

India: The dovish tone in its policy statement signals further easing might be in the pipeline to get the economy back on its feet -- Abhishek Gupta, India economist

Major central banks are grappling with the limits of their defense against the oncoming downturn. The European Central Bank has tipped a fresh round of monetary stimulus in September and has committed to a review of a range of tools to combat the severe slowdown on the continent.

The threat of a currency war has also added a fresh headache for the Bank of Japan, bolstering the safe-haven yen and further putting policy makers’ inflation goal out of reach.

“We already have growth slowing significantly,” and this week’s events show how “currency now is going to play another role in policy makers’ decisions,” said Sian Fenner, a senior Asia economist at Oxford Economics Ltd. in Singapore.

The Reserve Bank of India lowered its benchmark rate by an unconventional 35 basis points to 5.4 per cent per cent, its fourth cut this year. New Zealand reduced its rate by 50 basis points to one per cent; economists had forecast a 25 basis-point reduction. The Bank of Thailand’s rate cut was the first in more than four years.

The central bank action roiled currencies and pushed bond yields lower. The New Zealand dollar dropped more than 1 per cent against the U.S. currency and the Thai baht slid 0.2 per cent.

The Philippines is set to decide monetary policy Thursday, with 24 of 26 economists predicting a 25-point cut. Bangko Sentral ng Pilipinas Governor Benjamin Diokno this week said there’s space for 50 basis points of easing before year’s end.

Australia, which left interest rates unchanged on Tuesday, and New Zealand have little room to cut interest rates further, said Fenner. The larger moves this week might have been an attempt to issue rate cuts before currency conflicts make the decisions more complicated, she said.

--With assistance from Anirban Nag, Suttinee Yuvejwattana, Tracy Withers and Chester Yung.