The Singapore dollar weakened against the U.S. dollar in the Asian session on Wednesday after Singapore's central bank unexpectedly eased its monetary policy and downgraded its inflation forecast, citing lower oil prices.

At an unscheduled meeting, the Monetary Authority of Singapore (MAS) said it will continue with the policy of a modest and gradual appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band but the slope of the band will be reduced.

MAS also cut the inflation forecast for 2015, predicting prices may fall as much as 0.5 percent. Against the greenback, the Singapore dollar fell to nearly a 4-1/2-year low of 1.3563 from yesterday's closing quote of 1.3385 and held steady thereafter.

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