The Singapore dollar was trading at four-year lows against the United States dollar yesterday.
The low ebb comes amid market talk that the central bank here will next month move to allow the local currency to soften further to give a lift to manufacturers, as the inflation threat recedes.
A weaker Singdollar means that the nation's exports are cheaper, and therefore more competitive, abroad.
Singapore's consumer inflation and manufacturing data were weak for three straight months to January, prompting analysts to forecast that economic growth will be mild in the first quarter.
Industrial production for January grew 0.9 per cent from a year earlier, with one economist calling the number "quite atrocious" - way below a market consensus of a 3.7 per cent growth.
These downbeat figures have prompted suggestions that the Monetary Authority of Singapore (MAS) will ease monetary policy in the middle of next month.
The US dollar traded at 1.3637 of the Singdollar on Monday - the lowest point reached by the local currency since August 2010.
At 5pm yesterday, it was at 1.3650.
The Singdollar had weakened by some 2.8 per cent against the greenback this year, partly driven by the rush into American assets as the outlook improves for the world's biggest economy.
In contrast, the Singdollar was higher compared to a month ago against the Malaysian ringgit, the Indonesian rupiah, the euro and the Australian dollar as their economies, too, faced bumpy roads.
Although MAS made an unexpected move only five weeks ago to ease monetary policy, some economists say there is room for further easing at its meeting in the middle of next month.
"With inflation risk being so low, we think the odds are high" for an easing, Bank of America Merrill Lynch economist Chua Hak Bin told The Straits Times yesterday.
He expects the Singdollar to weaken to 1.4 per greenback by the year's end.
MAS manages monetary policy by guiding the rise or fall of the Singdollar against the currencies of its key trading countries within an undisclosed trading band.
Seven out of 11 economists and currency analysts surveyed expected the Singapore central bank to take an easing policy stance next month by readjusting the band, Reuters said on Monday.
On Jan 28, MAS decreased the slope of the band - in effect slowing the Singdollar appreciation.
Still, not everyone is convinced that MAS will take another easing stance just five weeks after the previous move.
That move, along with the expansionary Budget announced last week, should allow MAS room to stand pat at its meeting, said Mr Saktiandi Supaat, head of foreign exchange research at Maybank in Singapore.
Consumer prices have been falling in the past three months, largely on the back of the crude oil price plunge and lower food and services inflation.
The weak manufacturing data of the past three months also indicates that the economy will likely grow in the first three months at the lower end of the 2 per cent to 4 per cent band for the whole year, economists say.