SINGAPORE: Singapore's consumer prices fell in February for a fourth-consecutive month, the longest slide in more than five years, underscoring expectations that the central bank may ease monetary policy further in April.
The all-items consumer price index fell 0.3 percent in February from a year earlier, official data showed on Monday. Headline inflation had been expected to fall 0.2 percent, according to a Reuters poll.
The index has been falling on a year-on-year basis since November, pressured by sliding oil prices as well as falls in housing rents and private transport costs.
February's slide in headline CPI marked the longest decline since the second half of 2009, when headline CPI fell from a year earlier for six straight months.
The most likely scenario is for the Monetary Authority of Singapore to ease its exchange-rate based monetary policy further at its bi-annual policy review in April, said Jeff Ng, an economist for Standard Chartered.
"We see them easing by re-centering the Singapore dollar NEER. But I think it's going to be a close call," Ng said, referring to the Singapore dollar's nominal effective exchange rate (NEER).
The MAS, Singapore's central bank, manages monetary policy by letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed trading band based on its NEER.
In January, MAS unexpectedly reduced the slope of its policy band for the Singapore dollar in an unscheduled policy statement.
In a Reuters poll published earlier this month, seven of 11 analysts said they expect the MAS to ease monetary policy further in April.
Core inflation, which excludes car-related and accommodation costs and is the focus of monetary policy, came in at 1.3 percent year-on-year in February, higher than the market forecast of a 1.1 percent rise.
Industrial production data for February due later this week may be more crucial to the monetary policy outlook than the inflation data, said Tim Condon, head of research Asia for ING.
"Because if they have to revise the growth forecast...if they deem that necessary, then I think that would be a more likely trigger of a further easing by the MAS," Condon said.
More than 20 central banks around the world have taken advantage of cooling inflation to ease policy so far this year to boost sluggish growth.
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