THE Singapore dollar has fallen to near a one-year low against the US dollar on concern that the global economy is headed for a recession, undermining growth in the island's economy, Bloomberg news reported.

The currency declined for a second day on speculation investors will reduce holdings of emerging market assets.

The Singapore dollar was the second-worst performer among the 10 most-active currencies in Asia outside Japan today as Asian and US stocks weakened.

'Fears about a global recession are pushing the Singapore dollar lower', said Mr Norifumi Yoshida, vice president of the trading section at Mizuho Corporate Bank in Singapore.

'The trend for selling of Asian currencies may persist for a while.'

Singapore's currency fell 0.8 per cent to S$1.4809 at 10.13am on Thursday from S$1.4686 late in Asia on Wednesday.

It reached S$1.4851 on Oct 10, the lowest level since Oct 4, 2007.

The local dollar headed for a third weekly loss, the longest since Aug. 15, as the MSCI Asia-Pacific Index of regional shares fell 6.2 per cent after the Standard & Poor's 500 Index slipped 9 per cent on Wednesday.

A government report last week showed Singapore fell into the first recession since 2002, spurring the central bank to stop a policy favouring gains in the currency, to support the economy.

The Monetary Authority of Singapore, which relies on the currency rather than interest rates as its policy tool, said on Oct 10 it's shifting to a 'zero-per cent appreciation' stance.