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MARKET research firm BMI Research expects Singapore's central bank to ease monetary policy in April, via a downward recentring of the Singapore dollar nominal effective exchange rate (S$NEER) band.
"(This) will be tantamount to a one-off depreciation versus its trade-weighted peers. We forecast the Singapore dollar to average SGD1.4600/USD over the course of 2016, and for the consumer price index (CPI) to average 0.3 per cent," said BMI in a report released on Thursday.
It cited a backdrop of consistently negative CPI readings, poor export growth, falling industrial production, and middling economic growth.
It added that lower oil prices have upped the potential for consumer prices to remain sub-zero for a second straight year - a key consideration that it said will likely factor into the Monetary Authority of Singapore's (MAS) decision-making process.
Core inflation - which strips out accommodation and private transport costs - is the focus for monetary policy in Singapore.