Singapore dollar lower on slower inflation outlook

Singapore dollar lower on slower inflation outlook

SINGAPORE - The Singapore dollar eased on Friday after the central bank cut its inflation forecasts and as data showed the city-state's economy unexpectedly contracted in the first quarter.

The Singapore dollar slid as much as 0.2 per cent to 1.2393 against the US dollar.

Ahead of the forecast cut and GDP data, the local currency was trading around 1.2370.

The Monetary Authority of Singapore (MAS) lowered its inflation forecast for 2013 to 3-4 per cent from the previous range of 3.5 to 4.5 per cent and cut its outlook for core inflation to 1.5 to 2.5 per cent, citing the weaker-than-expected price increases over the past few months.

But the central bank held monetary policy steady as expected and said it will maintain the Singapore dollar's "modest and gradual" appreciation path.

The city-state's economy contracted a seasonally adjusted and annualised 1.4 per cent in the first quarter from the previous three months, data showed, missing market forecast of 0.7 per cent growth.

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