HONG KONG (BLOOMBERG) - Central banks in Asia face increasing calls to cut interest rates as they jump into action against a spiraling coronavirus crisis that's hammering tourism, travel and confidence across the region.

The People's Bank of China trimmed some interest rates on Monday (Feb 3) and injected massive liquidity into the financial system to shore up slumping markets. Indonesia's central bank said it was taking "bold" steps to bolster the nation's currency and bonds.

In Singapore, which has confirmed 18 cases of coronavirus, authorities are bracing for an economic hit that may be worse than the Sars outbreak in 2003. The government has halted travel from China, where about 20 per cent of the city-state's international visitors come from.

Singapore's Feb 18 Budget will likely provide support measures for industries like tourism and transport, and economists - including from JP Morgan Chase & Co and Citigroup - see a higher risk that the Monetary Authority of Singapore will ease policy in April.

The rest of Asia - set to see the worst spillovers from the virus due to its dependence on Chinese demand and tourists - boasts a handful of central banks that have space to ease monetary policy in a world of rock-bottom interest rates.

Attention will first swing to Australia, where the central bank will make its policy decision Tuesday. Markets aren't expecting a cut just yet, but economists will scour the accompanying statement for the Reserve Bank's views on the virus's impact.

Next up is Thailand, where there are growing calls for a move Wednesday, but no consensus estimate so far that a cut is coming. By contrast, a reduction is expected Thursday in the Philippines, which has reported the first death from the coronavirus outside China.

TRAVEL CURBS

India - which on the weekend announced a budget that underwhelmed those hoping for more stimulus - also sets policy on Thursday. A recent spike in inflation is expected to keep the central bank sidelined, but some economists think it will have to act at coming meetings to spur a faltering economy.

Growth risks are accelerating as China enforces strict travel curbs and airlines around the world suspend service to the mainland. Bloomberg Economics estimates that even if the virus outbreak were severe but short-lived, China's first-quarter GDP growth would hit a record low 4.5 per cent. UBS Group's China economist, Tao Wang, predicts a slump to 3.8 per cent.

"The downside risks to growth have increased substantially in the short-term, especially for the more tourism-oriented countries like Thailand," said Priyanka Kishore, head of India and South-east Asia research at Oxford Economics in Singapore.

MANUFACTURING FALTERS

Even before the virus spiral, manufacturing gauges signaled a shaky start to the year as the US-China trade agreement failed to boost sentiment. South Korea's purchasing managers index - a key barometer of global demand - fell to 49.8 in January from 50.1 in December.

In Thailand, restrictions on Chinese travel have hammered the tourism industry, which makes up about one-fifth of the economy. Growth was already taking a hit from drought and government spending delays, with the central bank last week signaling it may cut its 2.8 per cent forecast for economic growth this year.

"The central bank needs to do something to help shore up confidence now," said Burin Adulwattana, chief economist at Bangkok Bank. "We used to think the revenue stream from tourism will help drive the economy this year while other engines are weak. Now that engine is gone. One cut may not be enough this year depending on the severity of the pandemic."

Bank Indonesia, which cut interest rates four times last year, stepped up intervention in the bond and currency markets Monday to stem losses in the rupiah. Deputy Governor Dody Budi Waluyo said the bank is open to further policy action as it assesses the impact of the virus outbreak, and "future utilization of easing space will be carried out at the right timing."

David Sumual, chief economist of PT Bank Central Asia in Jakarta, said if the situation worsens, "the government may opt to stimulate the economy via a more aggressive fiscal policy, since doubts remain over the efficacy of monetary easing amid tepid loan demand."